Obesity is a mounting issue faced by many countries all over the world. Recent 2016 statistics have shown that Australia is the 5th most obese country in the world. “The Medical Journal of Australia found that obesity in Australia more than doubled in the two decades preceding 2003, and the unprecedented rise in obesity has been compared to the same health crisis in America "(Dunn, A., 2003). There has been increasing interest in the implementation of the sugar tax as countries are now trying to curb the issue by introducing or have already introduced tax on soft drinks. How the tax aims to work is by raising the price of the product leading to a decrease in its sales. The decline in sales of the products would reduce the intake of sugar,
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However this comparison has it faults, the main issue being that the scale of tobacco taxation is a lot higher. There is not enough advantages to prove that the high tax implied for cigarettes would have as good outcomes for the sugar tax. We need to look at the fact that all the substitutes for cigarettes are non-hazardous to health, thus the high tax would only affect consumers who are not willing to reduce their cigarette consumption for a substitute that would benefit health. Unfortunately when it comes to food the situation is different. Food is a survival necessity, if one source of high sugar drinks become more expensive consumers would then opt for the substitute or a cheaper alternative to of the same product. There is however no guarantee then that the choice of substitute would be better for health or have less sugar. Many substitutes that consumers would navigate to would be fruit juices, full fat milk and also including alcoholic beverages such as wine and beer. There has been evidence derived which shows that people do switch to substitutes when high sugar drinks are highly taxed (Dharmasena and Capps 2011). In the generation we live in consumers are driven towards energy dense food, the most likely effect of taxing high sugar products is , as Ryan Edwards notes in Preventive Medicine, that ‘consumers will probably increase their demand for cheaper calories, leaving …show more content…
Studies in USA focusing on the sugar tax implementation by Fitts and Vader (2013) concluded that their research ‘does not support the theory that soda taxes have a negative effect on body-mass index’ (Fitts and Vader 2013). Which ties in with the findings of Fletcher et al. (2010) and others, Powell et al. (2009) who found ‘no statistically significant associations between state-level soda taxes and obesity’. With this being said it is hard to justify that lower income earners would choose the healthy alternative like water or make proper use of the long run benefits from the tax. Lower income earners spend a higher portion of their income on high sugar drinks compared to higher income earners , it clear that why would be price sensitive however they are more likely to then seek out for cheaper substitutes to suffice their sugar needs. Obese people are more prone to have price inelastic behaviour and tend to be the least responsive to price changes. The main idea is not the concept or effectiveness ensuring the cost for sugary drinks reflects the true social and economic costs of the product, but in the framing and understanding of the approach
However this comparison has it faults, the main issue being that the scale of tobacco taxation is a lot higher. There is not enough advantages to prove that the high tax implied for cigarettes would have as good outcomes for the sugar tax. We need to look at the fact that all the substitutes for cigarettes are non-hazardous to health, thus the high tax would only affect consumers who are not willing to reduce their cigarette consumption for a substitute that would benefit health. Unfortunately when it comes to food the situation is different. Food is a survival necessity, if one source of high sugar drinks become more expensive consumers would then opt for the substitute or a cheaper alternative to of the same product. There is however no guarantee then that the choice of substitute would be better for health or have less sugar. Many substitutes that consumers would navigate to would be fruit juices, full fat milk and also including alcoholic beverages such as wine and beer. There has been evidence derived which shows that people do switch to substitutes when high sugar drinks are highly taxed (Dharmasena and Capps 2011). In the generation we live in consumers are driven towards energy dense food, the most likely effect of taxing high sugar products is , as Ryan Edwards notes in Preventive Medicine, that ‘consumers will probably increase their demand for cheaper calories, leaving …show more content…
Studies in USA focusing on the sugar tax implementation by Fitts and Vader (2013) concluded that their research ‘does not support the theory that soda taxes have a negative effect on body-mass index’ (Fitts and Vader 2013). Which ties in with the findings of Fletcher et al. (2010) and others, Powell et al. (2009) who found ‘no statistically significant associations between state-level soda taxes and obesity’. With this being said it is hard to justify that lower income earners would choose the healthy alternative like water or make proper use of the long run benefits from the tax. Lower income earners spend a higher portion of their income on high sugar drinks compared to higher income earners , it clear that why would be price sensitive however they are more likely to then seek out for cheaper substitutes to suffice their sugar needs. Obese people are more prone to have price inelastic behaviour and tend to be the least responsive to price changes. The main idea is not the concept or effectiveness ensuring the cost for sugary drinks reflects the true social and economic costs of the product, but in the framing and understanding of the approach