Splash Soft Drinks Case Study

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The UK soft drinks industry levy, due to be introduced in April 2018, is likely to have significant health benefits, particularly among children, according to the first study to estimate its impact published in The Lancet Public Health

The proposed tiered levy relates to the sugar content of drinks: no tax on diet and low sugar drinks; a low tax on mid-sugar drinks which contain 5-8g of sugar per 100ml; and a high tax on high-sugar drinks with over 8g of sugar per 100ml. 

Researchers modelled three ways that the soft drinks industry may respond to the levy:  

  • by reformulating drinks to reduce sugar content
  • by passing some of the levy to consumers by raising the price of sugary drinks
  • by using marketing to encourage consumers to switch to lower sugar drinks.  

For each response they identified a realistic better and worse case scenario for health, by estimating the likely impact on rates of obesity, diabetes and tooth decay. 

They found that reducing sugar content is likely to have the greatest beneficial impact on health, with additional benefits if industry increases the price of high and mid-sugar drinks, or successfully uses marketing to persuade consumers to switch to low sugar drinks. 

The authors estimate that a reduction of 30% in the sugar content of all high-sugar drinks, a step already implemented by some manufacturers, and a 15% reduction in mid-sugar drinks could result in 144,000 fewer adults and children with obesity, 19,000 fewer cases of type 2 diabetes, and 270,000 fewer cases of tooth decay per year. 

Passing on half of the cost of the levy to consumers leading to an increase in the price of high and mid-sugar drinks of up to 20% was estimated to reduce the number of adults and children with obesity by 81,600, and result in 10,800 fewer cases of diabetes and 149,000 fewer decayed teeth annually. 

Children are likely to benefit most, but the study also shows that the health benefits of the tax could be reduced if industry increases prices across their drinks range (including zero sugar/diet drinks, bottled water, and fruit juice) or if heavy marketing leads consumers to switch from low to mid-sugar drinks. 

The researchers note that the most likely response from industry will involve a combination of the approaches outlined in the study, and although there is a high level of uncertainty in the estimates, the findings provide much needed evidence on the relative effects of different industry responses, and the possible magnitude of health outcomes. They add that the study did not look at the time lag between implementation and effect of the changes, but suggest that improvements in tooth decay would be seen first, followed by reduced rates of obesity and cases of type 2 diabetes.

Lead author of the study, Dr Adam Briggs, from Oxford University’s Nuffield Department of Population Health said,

“Our study provides the first estimates of the likely health impact of the UK soft drinks levy. The good news is that our study suggests that all of the most likely industry responses to the tax including reducing sugar content of soft drinks, raising prices of high-sugar drinks and increasing the market share of low-sugar drinks have the potential to improve health by reducing rates of obesity, diabetes and tooth decay.”

Co-author Professor Susan Jebb, from Oxford University’s Nuffield Department of Primary Care Health Sciences, said,

“In spite of the uncertainties, the direction of the effect is clear; this levy will have a positive impact, especially on children’s health. Of course, on its own a soft drinks levy cannot solve the obesity crisis, but we should not underestimate the importance of this step, both for the UK and as a case study for other parts of the world. Then, once this Bill is passed, we need to consider how to take effective action to reduce other sources of sugar in children’s diets, notably confectionery, which has so far been relatively overlooked while hearts and minds have been focused on the soft drink levy.”

The research was a collaboration between the Universities of Oxford, Cambridge and Reading in the UK and the University of Otago in New Zealand.

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