Is it time for a sugar tax?

Hello, and welcome to this week's Health Report with me, Norman Swan. Today we thought we'd turn the program over to a topic that keeps on getting talked about, but nothing much seems to happen. So let's find out what it's about. 60% of Australians are either obese or overweight. We bang on about the obesity epidemic. Many people think that is just a matter of willpower, people just can't stop eating and it's weak will and poor character that causes the obesity epidemic, whereas there is a solid body of evidence to suggest that actually what's happening here is an industry selling us low value calories that are cheap and people put on weight. One source of those calories is sugar and another source of those calories is fat, and people have been suggesting that you should put a tax on sugar in some foods and particularly in soft drinks. And other people are talking about a fat tax as well. 18 countries or thereabouts have actually tried a sugar tax, does it work? What would have to happen in Australia to actually put it into action and what would we actually look for as a result, and would we have a rebellion from One Nation and sugarcane farmers?

With us to discuss this are: Jane Martin, who is executive manager of the Obesity Policy Coalition, which is a coalition of Cancer Council Victoria, Diabetes Victoria and the Deakin University; Nick Talley who is editor-in-chief of the Medical Journal of Australia and pro Vice Chancellor of global research at the University of Newcastle; Alexandra Jones who is a public health lawyer and researcher at the Georgia Institute for Global Health at the University of Sydney; and Robert Moodie, who is Professor of Public Health at the University of Malawi and the University of Melbourne. Welcome to you all.

Ali Jones, what's the international evidence here?

Alexandra Jones: I think what we know, and we know this well from tobacco, is that price influences consumption. At the international level we have a lot of recommendations now from the World Health Organisation and a growing consensus that we could use these sorts of price measures effectively on food as well, and I think they are going after the nutrients that we consume the most of first and where we think we could have the biggest impact.

Norman Swan: We'll come to that in a moment. Rob Moodie, price did work with tobacco? Price was one important mechanism for actually controlling tobacco use?

Rob Moodie: Did work and does work, probably the key factor. I mean, you need a combined group of strategies, advertising bans, you need smoke-free regulations, but price has been the key driver of reducing tobacco and we've seen that now in not only Australia, in many high income countries. But we are now starting to introduce that in places like Laos, Vietnam, Thailand and the Philippines, and it's starting to work.

Norman Swan: So how much do you have to put up the dial on price to get what sort of reduction in use?

Rob Moodie: I actually don't have that…Jane might remember. But certainly you need to do it enough. In other words, in Australia we put up the…I think in the WHO you have to have at least 70% of the price is tax, and Australia it's much, much more. But we've introduced…in 2010 the price by 25%. Then in 2000 I think 14%, 15%, 16%, 12.5% each year. So we know plain packaging has been a very important part of reducing smoking prevalence in Australia, but price has been I think the key determinant.

Norman Swan: In all groups of the population or just people who are most price sensitive, in other words the poor?

Jane Martin: We know that adolescents and low income are more sensitive to price, and that's across the board, just not with tobacco taxes, but they are the groups who have the highest smoking prevalence and they have the most to gain.

Rob Moodie: Yes, and that's often why people will argue against the tax, they'll say, well, it's retrogressive, it will hurt the poor most. Well, the point is, as we've seen with tobacco, if you can get those that have least income actually to give up, they can use that money for much healthier alternatives.

Norman Swan: So Jane, one of the arguments with tobacco and alcohol and other drugs is that if you're not using drugs irresponsibly or badly or in an unhealthy way by the age of about 20 you are unlikely to, therefore you do target adolescents. To what extent (and we will come to more specifics about a sugar tax or a fat tax later)…to what extent is it the same story with obesogenic food?

Jane Martin: Well, we know that sugar does have an impact on the brain, it does excite the pleasure centre of the brain. We know that these products are very…high sugar products are heavily marketed to young people and they developed their tastes when they are young, particularly for sweetness. And we know that adolescents in particular are very high consumers of sugary drinks, particularly boys, and are way in exceeding the World Health Organisation guidelines. But also very young children are starting to drink these drinks very, very early, and that's something that we haven't seen before either. So it's a huge source of added sugar in the diet. There's no benefit from this. The dental health implications are really serious, and our dental health is very poor in our children as a result of that. So it's a good place to start, with young people, to prevent dental disease and to prevent them going on to develop overweight and obesity and the associated diseases.

Norman Swan: So Nick Talley, does the medical profession have a position on this?

Nick Talley: Well, certainly the Council of Presidents of Medical Colleges had a summit about obesity, and one of the issues that was clearly flagged was the need for financial incentives to create an effective strategy and to start really early and with the whole family. And that means prevention, really almost preconception and further on as children are born, so the whole family is engaged.

Norman Swan: But if you talk to industry about this…so, for example, you take Drink Wise, which is an alcohol funded thing, they'll spend anything they like on it and they'll say just educate people, tell them that they shouldn't be doing it and we'll give you all the money in the world to do that. Presumably that's because they know it doesn't work.

Nick Talley: Well, there's not a lot of evidence that education alone does a lot in this space, and this was reviewed by the summit. Others may have an opinion here, but certainly the evidence that I've seen and the evidence that I've been told all suggest education alone will fail, guaranteed.

Norman Swan: Because you can ask the average mum of almost any socio-economic grouping, they know what they shouldn't be eating.

Nick Talley: I suspect some of them do, many of them do, I think so.

Jane Martin: We've had a Live Lighter campaign being run in a number of states and territories in Australia, and one of them is around sugary drink consumption, and in fact that has been very successful. We think people know sugary drinks are bad, that they contribute to overweight and obesity and they make you fat, and people don't know that. And when they do have that information and they are drinking those drinks, they slow down and stop.

Norman Swan: So we don't need a sugar tax?

Jane Martin: We do because we need to accelerate this. We need to do both.

Alexandra Jones: I think the point is that education is necessary but not sufficient. And in tobacco it's in the global treaty that what we need, what the good gold standard is is a comprehensive approach. So we need the education, we need the health stars we've got, we need the dietary guidelines, but a tax would be another simple and powerful step.

Nick Talley: Changing behaviour is really hard. Ingrained behaviour doesn't change easily. You need multiple incentives, a multipronged approach, that's why education doesn't work terribly well.

Rob Moodie: I mean, we've spent 30 or 40 years gradually, surreptitiously, strategically increasing the average consumption of sugar for the average Australian. To the point where it's very dangerous now. So just as you can ramp this up, you can also ramp it down, and you can actually ramp it down without people knowing because there's so much…I mean, if you take a bottle of one particular barbecue sauce, it's got over 100 teaspoons of sugar in it. The average person will not know there's 10 teaspoons of sugar in their Coke. Imagine if you saw them in a coffee shop and they've got their cappuccino and they are tipping in 10 teaspoons of sugar, you'd think, my goodness, they're nuts. This problem is fundamentally still hidden.

Norman Swan: So let's just get the elephant out of the room for the moment in terms of the obesity epidemic, as we call it, to the extent to which some people are thinking, well, it is just…nobody ever got fat in Belsen, it's what they put in their mouth, they should just control it, and there's no role for the state here. What's the argument against that?

Jane Martin: Well, I think the issue is that the industry are driving demand and consumption and it's in their interest to do that. Highly processed foods, many of which are high in sugar are very cheap to produce, there is a very high profit margin. You try and find an apple in a car parking station or an airport, it's much easier to find a packet of chips and a soft drink, and we are surrounded by advertising, marketing, promotion of these foods. We've just seen the apples come in and sponsor the women's netball. That is a rare, rare example. What we've just had, a summer of the Big Bash League brought to you by fried chicken and frozen sugary drinks, and that's directed to children and families. So we are absolutely surrounded by levers which push us in the opposite direction of a healthy diet, and we are driven by price, the type of products these are and the promotion of these products, and they are so available, they are everywhere.

Norman Swan: And Nick Talley, there's something physiological going on here, research here in Melbourne, Joe Proietto's group has shown that by the time you are in adolescence, if you are fat or obese you've changed the hormones in your brain, so childhood obesity is actually important for the rest of your life.

Nick Talley: Yes, you change your brain, you change your gut bacteria. There are physiological changes that then stay with you, and unfortunately they reinforce the behaviours of eating more sugary and high fat foods, and that's what happens.

Norman Swan: So let's go back to the question I asked at the beginning. But before we get to specific countries, Ali, as a lawyer, give me the spectrum of how this has been put in place around the world, before we find out what results they've got. What are the legislative changes or regulatory changes that people have tried out?

Alexandra Jones: We have countries experimenting with a variety of taxes, and they can do that in different ways depending on their own tax system. But I think what they're doing is fundamentally they are saying we want to change the price of something and they are very careful about the objectives, and we did this with plain packaging in Australia. So you say; we're going to single out a product that we have enough evidence to link this particular product with some harm, so sugary drinks is a good example of that, and then we're going to say this measure will decrease consumption, it would decrease the purchasing, and it will increase awareness of the health risks. What they won't say is that a measure like that would overall impact obesity, because that is very hard to show. So they pick these little measures and they pick things that we can measure that it will impact and say that this measure, together with a range of measures, is going to work.

Norman Swan: In terms of reducing consumption of that particular group of products.

Alexandra Jones: Yes, and they will frame that as part of a strategy to improve diets.

Norman Swan: So what do they have to put in place? Is it a tax? What is it?

Alexandra Jones: Yes, it's a tax. So in Mexico it's a 10% tax, it gets passed on to the consumer. So effectively the consumer pays 10% more. But that's actually quite low. We think that it would be better to be at least 20%. That's what the WHO is recommending.

Norman Swan: Presumably that will vary from country to country, you're going to have to get your settings right, so there's a bit of experimentation that needs to go on.

Alexandra Jones: That's true, there is, and some countries like the UK has done quite an interesting design where they are putting a varying tax, depending on the sugar content of the product. And the purpose of that is to incentivise companies to reformulate their products. So what you already see before the tax is coming in is like the Scottish drink Irn-Bru…

Norman Swan: I remember it well! Many fillings in my mouth are caused by Irn-Bru!

Alexandra Jones: Well, they've already announced that they are going to cut the sugar in that product by half. So it's obviously still sweet but…

Norman Swan: I was on your side until you told me that.

Alexandra Jones: In one fell swoop you've just removed a whole lot of sugar from the food supply. So without any individual having to do something, you've just changed the food supply.

Norman Swan: Okay, and is there a trade-off? So what I've heard discussed is that…for example, if you are Coca-Cola and you're going to put a 20% hike on Coke, you get a lower tax or you make it cheaper to buy Coke Zero, to use brand names. Is that in place so that in fact the manufacturer doesn't lose out, that there is a trade-off in products?

Jane Martin: That is in place. So this tax only applies to the high sugar products, and it doesn't apply to the diet drinks or water. Interestingly Coca-Cola has just cut the price of their water because water sales have increased in Australia and they are competing for the market share. So they understand price influences consumption.

Norman Swan: So the argument is then the manufacturer…well, the barbecue sauce might be a different matter, they might have to change the sugar content, but in soft drinks they might actually come out even-Stephen because the sales go down in their sugar drinks but go up in their other products.

Rob Moodie: Absolutely, and that's in a sense what is being encouraged. The way that you shift consumption patterns and the more that this sort of forms the regulation, companies will respond, they know how the market works, they know how sensitive people are to prices. So the more that we can actually encourage to push them in healthier and healthier directions, just as we can encourage people in vending machines to put the really sugary drinks at the bottom.

Norman Swan: So why are sugary drink manufacturers putting the wagon train in a circle and fighting this?

Rob Moodie: Well, it's interesting when you look at any forms of suggested regulation, any government approaches to this, there is fundamentally a view that says government does not have a role in what we eat or drink, regulation is a bad thing of any form. And what we've found over the last 40 years, and it comes from the Merchants of Doubt book by Naomi Oreskes, is that the enemies of regulation have become the enemies of science, and that's where we are here.

Norman Swan: So what you're talking about is they cast doubt on the evidence.

Rob Moodie: Absolutely, and they will cast also doubt on the researchers themselves, as well is the evidence.

Nick Talley: I think there's a fear it will be successful, and I think that means that actually eventually they will lose a little bit of money. I think there's a real fear within corporations, at least the ones I've spoken to, that that may be the case. And that's the worry, that it may actually work and work really well. But in terms of health benefit and in terms, frankly, of the community's interest, this is important and needs to be seriously considered by the politicians.

Norman Swan: Presumably the wagon train is in a circle because sugar is the first step, then it's saturated fat.

Nick Talley: It could be.

Norman Swan: So Jane, take us through what you know about the countries that are putting this into place and the sort of results that they've got. Because the Merchants of Doubt have said it doesn't work so why would you do it.

Jane Martin: Exactly, in a very black and white way they've said that the changes in Mexico haven't worked. That's absolutely not true, we have really good evidence. This has been evaluated very, very carefully because it's a testing ground for the rest of the world, proof of concept is being formed there. And what they've found is in the last two years overall the consumption of sugary drinks with a 10% tax has gone down by 7.6%, and the decline has been highest in low income groups and they are the very groups who are suffering the most from this epidemic. So it's really supporting them to change their diets and drink less sugar.

Norman Swan: It's about the same ratio as tobacco in terms of the tax and the reduction in consumption.

Jane Martin: And Berkeley have a 20% tax, it's a retail tax, and that…

Norman Swan: The Berkeley in California?

Jane Martin: Yes. And that has seen much, much greater declines, I think around 26% declines. So that's really significant changes in a population that will flow through to health outcomes.

Norman Swan: And what has happened in the UK?

Jane Martin: The UK, as Ali said, they are putting a tax to encourage reformulation, so the tax is on the manufacturer. And we've already seen huge changes, it's created a lot of public discussion. So already people are understanding that sugary drinks are an issue for their health and reducing consumption, and then we've seen the manufacturers…Tesco have changed all their products, Lucozade, Ribena, these are iconic drink brands…

Norman Swan: Irn-Bru.

Jane Martin: Irn-Bru. I can't say that as well as you! But the sugar levels in all those drinks are already coming down. And so the estimated earnings for the tax office have already been reduced.

Norman Swan: Some people say we should trade off and the earnings should actually go to health, and some people say, no, you should actually put the earnings from this into other areas to make more healthy products more attractive. In other words, you actually manipulate the market a little bit using the taxes. What should happen to the windfall?

Rob Moodie: Well, one of the things you might want to do is to actually buy out the sponsorships…

Norman Swan: Now, we should say here that Rob Moodie used to be the CEO of the Victorian Health Promotion Foundation, now known as VicHealth, which did just that.

Rob Moodie: Exactly. And if you look at some of the biggest opponents to this sort of approach in Australia, it's Cricket Australia, it's the big football codes, because the kings of Australian sport are the ambassadors of sugar and ambassadors of booze and the ambassadors of gambling. It's not a really good look. And I think that the punter always pays for the sponsorship because either through buying the product themselves or through a hypothecated or dedicated tax, we pay for it. It's much more sensible when we are paying that percentage of the cost that goes into a sponsorship that it goes into a good sponsorship.

Norman Swan: So you've got a situation in Australia…let's start talking about how you implement this in the Australian environment. So you've got a situation in Australia where the crossbenchers hold the balance of power in the Senate, it's very hard perhaps for legislation. One Nation has got a lot of senators there that last week they held up legislation to get a code of conduct for the sugar industry in Queensland. It's not just Queensland, it's also northern New South Wales. And you've got a Liberal Party hostage to the right wing who are going to say this is a Nanny State and the government has got no place to be here. Let's start with the sugar farmers. Rob, tell me, we were a big producer of tobacco, and when people were saying we should be taxing tobacco and stopping that, there was a big lobby from the tobacco farmers in Australia. I haven't heard from the tobacco farmers in a while…

Rob Moodie: That's because they don't exist.

Norman Swan: Well, did they all go bankrupt, did they shift crop? What happened to them?

Jane Martin: Well, what happened was the revenue raised from an increased excise in tobacco tax, some of that money was set aside to support the tobacco growers to shift to other products, to grow other products. So there was a scheme developed to help them transition. They are in very rich alluvial soil in valleys…

Norman Swan: As indeed are sugarcane farmers.

Jane Martin: And so that's a good prospect for a farmer who wants to grow produce. If everybody ate all the recommended amount of fruit and veg, we don't grow enough for people to do that. So let's promote fresh fruit and vegetables and let's move that land over to something that will improve people's health in the longer term.

Norman Swan: But with a lower margin.

Rob Moodie: Well, it may not, no, because tobacco growing, for example, is not a terribly good way of earning an income, it's really brutal for the tobacco farmers. I think probably you'll find that the sugar farmers' income is far more dependent on global pricing and global markets than it is on anything that a sugar tax in Australia could ever impact on.

Norman Swan: Ali, you were telling me a little bit about the structure of the sugar market and where it goes from sugarcane farmers here.

Alexandra Jones: Yes, I think what we know, and this was in the Grattan Institute report that came out last year on this, was that at least 80% of the sugar grown by Australian farmers is actually exported. So then if you consider what is left here and remains in use, but all the other uses, so packets of sugar in the supermarket and different products…

Norman Swan: Barbecue sauce.

Alexandra Jones: Barbecue sauce…

Norman Swan: Australian Irn-Bru.

Alexandra Jones: Sweet yoghurts. But sugary drinks is likely to be quite a small percentage. And so the impact of a small price change on those products, not a big impact on that industry.

Norman Swan: Right. You can stand up and say that in Australian Parliament. So what's the process…actually, before I get to that process forward…by the way, you're listening to the Health Report here on ABC Radio National, ABC News radio and CBC radio across Canada, and we are talking about sugar tax if you haven't twigged to that already. My name is Norman Swan. My guests are: Jane Martin from the Obesity Policy Coalition in Victoria; Nick Talley who is editor-in-chief of the Medical Journal of Australia, and also Pro Vice Chancellor of global research at the University of Newcastle; Ali Jones who is a public health lawyer at the George Institute for Global Health in Sydney; And Robert Moodie, he spends his life between Malawi and Melbourne, Professor of Public Health at the University of Malawi and the University of Melbourne.

Fat tax? Is anybody doing that? Does it work? Let's assume that we've got the sugar tax in place, what happens next, because as you said right at the beginning, Ali, you said, well, you've got to take individual products, see whether that matters and hope it makes a difference, but you are not necessarily going to show that you can shift the dial on obesity until you actually deal with all the empty calories, a lot of the empty calories on the shelf. Anybody doing a fat tax?

Jane Martin: Denmark has done a fat tax, and the sugary drink industry and others in Australia say it didn't work, it did in fact work but it got knocked off because of the opposition, there was a lot of scaremongering done by industry, they worked very, very hard…

Norman Swan: Lurpak Butter but got them in the end.

Jane Martin: It was to reduce heart disease, so it was designed as…

Norman Swan: So it was a saturated fat tax.

Jane Martin: It was a saturated fat tax designed to reduce heart disease, not overweight and obesity because that was the problem in that country.

Alexandra Jones: I think the thing that we can learn from Denmark is a few lessons on how not to implement a fat tax, but not necessarily that it's a bad idea but just that there are difficulties in defining the product, setting the tax at a high enough amount to make a difference, and then defending…there was a change of government there, so I think there were a lot of factors that played into why the tax was set aside before it really had a chance to work.

Norman Swan: So just give us a few more details about how they did it.

Alexandra Jones: They put it on popular high saturated fat products.

Norman Swan: So high-fat dairy?

Alexandra Jones: Yes, high-fat dairy, some meat products, but the high-fat meat products like sausages and high-fat processed meats. So high-fat yoghurts, things like that. So they were quite careful as to how they set it up, and they looked at what people were actually eating and what was causing the greatest issues. So they were careful with that but they had a problem with cross-border. But what they found was…

Norman Swan: European community problems…

Alexandra Jones: Well, they've got borders. We're an island so we don't get the smuggling type situation, so we are kind of protected from that to some degree. But people did eat less saturated fat, it did have the intended consequences.

Rob Moodie: In a very short time. I mean, this was what was quite staggering in Denmark, it was such a short time, and they could even tell a difference in that short time. So that's why it is actually important to be very specific about what the tax is, what the expected impacts are and that we can actually measure them. And even then with good evidence it's how we can actually explain the evidence back to the political decision makers and to the community, because often it will be completely distorted by vested interests. I mean, that's their job. Their job is to make money out of their products, and they will fight for their right to do so.

Norman Swan: So when all these things happen in these various countries—fat taxes in Denmark, sugar taxes in California and Mexico and so on—how did it actually happen? Was there just guerrilla action, public conversations, a Prime Minister or President who cared? What was the story?

Jane Martin: Well, I think in a country like Mexico, diabetes is just such an enormous problem, and sugary drink consumption is incredibly high. You know, you have these companies sponsoring schools for example. It is very much embedded in the population's diet. So it was the epidemic of diabetes, which is incredibly expensive for such a poor country to manage, and so they had this out-of-control public health issue that was very well described by the medical community, and that advocacy…it began quite some time ago, but very much engaged with civil society. They had quite a strong campaign not just around sugary drinks but around advertising and marketing and a suite of actions that need to happen by government. And the campaign really focused on the burden on families, and children were very much engaged in this as well. So it was very much about a community response to a really serious public health issue.

Norman Swan: And from go to whoa? I mean, how long did it take from the early conversations to implement? About a decade?

Rob Moodie: Several years. It's interesting when you look at this historically, at most of the really effective public health interventions, there's been an enormous amount of buildup to building the pressure, building the evidence, building community support for this, trying to get senior decision makers on side, and then there will be a tipping point. In road trauma, in seat belts, it was actually…

Norman Swan: It was the College of Surgeons.

Rob Moodie: Yes, they built the pressure, but it was actually Rupert Hamer taking Arthur Rylah, the number two in charge, he was the deputy Premier, out to the Austin, to the spinal unit, and David Bourke showed them through and said, 'There are 40 people here, and none of them would be here if we had seatbelts.' That convinced Rylah, it convinced Henry Bolte to bring it in. With VicHealth it was Nigel Gray talking to David White. David White's dad had emphysema. Nicola Roxton's dad, same thing. It's an issue where you can get key leadership twitches, it changes at certain points, but you've got to have consequence…that's when people say to me, oh, there's no hope of a sugar tax at the moment, I'm saying, I'm sorry, I'm here for the long haul. We are 60 years since we knew that tobacco causes lung cancer, still 40% of 13- to 15-year-old Indonesian boys smoke. It takes time to win these battles.

Nick Talley: But we have a health crisis in Australia that's under-recognised. The diabetes health crisis is just under-recognised, and yet it's a real problem for public hospitals, for general practitioners,, for families, for the entire community, and it's time we did something about it rather than sitting on our hands saying it's all too hard, or we will leave it up to industry to make a decision about our health. And it's not a sugar tax we need, it's a health tax.

Jane Martin: And we are all paying for it in the meantime.

Norman Swan: So Nick, will the medical profession put their shoulders to the wheel?

Nick Talley: Well, I'm reasonably confident they will actually. The Council of Presidents of all the medical colleges met with experts and with industry and with representatives of all sorts of groups to talk about this last year. I was amazed there was agreement in the room about moving forward and the profession should be leading by example. That's a remarkable shift I think, a very good shift. But we need more than the professions…

Norman Swan: And they made a big difference. The agitators for tobacco control…

Rob Moodie: And road trauma.

Norman Swan: …used the AMA, College of Surgeons and so on, College of Physicians…

Rob Moodie: But also the media, the churches. There are other groups we've just got to bring onside.

Norman Swan: Going to get the lawyers on, Ali?

Alexandra Jones: The lawyers will be here to design the law, to make it smart…

Norman Swan: Oh, they win every time!

Alexandra Jones: And then also to defend it in the case that it's challenged. Lawyers in plain packaging has been a huge…there's a huge role for lawyers there.

Norman Swan: Well, let's hope that the lawyers, the public health people, the doctors and everybody gets together on this because if you haven't been convinced that regulation has to be one of the ways we go here, well, you just have to get off Radio National and find something else to listen to, like Alan Jones or something like that! Thank you all very much indeed. Jane Martin, Nick Talley, Ali Jones, and Robert Moodie. You've been listening to the Health Report, and I hope you can join me next week.