Sugar, tobacco and pricing signals: A taxing argument

It has been established that increases in the cost of tobacco lead to decreases in its consumption. The Federal Government has successfully employed this tactic in Australia through excise tax since 2013, and has announced further price increases of 12.5% per year until 2020.
 
Advocates for public health in Australia are calling for a similar approach to added sugars, especially in sweetened beverages. 
 
‘We see this as comparable to the war on tobacco,’ Australian Medical Association President Dr Michael Gannon said on ABC Radio last week. ‘One of the easiest [actions] to implement, and one of the simplest to call for, is a tax on sugar-sweetened beverages.’
 
This observation has received broad support from Australian health organisations and is certainly not unprecedented in healthcare advocacy, with the World Health Organization (WHO) declaring in 2016 that, ‘Just as taxing tobacco helps to reduce tobacco use, taxing sugary drinks can help reduce consumption of sugars’.
 
Dr Elizabeth Sturgiss, GP and lecturer in general practice at the Australian National University in Canberra, told newsGP that the comparison is a relevant one.
 
‘It’s related to what we know about tobacco tax,’ she said. ‘If you look at all of the interventions that have been used across populations to reduce tobacco use, when prices went up, that was the most effective way to reduce people smoking and stop new people becoming smokers.
 
‘We know that pricing sends a really strong signal to people in our communities and has a really big effect on their behaviour.’
 
A number of countries around the world have implemented a sugar tax or similar measures. Perhaps the most closely followed by health experts is Mexico, one of the first to impose a tax on sugary drinks in 2014 in response to a 71% rate of overweight and obesity in its adult population. Although it is still too early to gauge the effects of the tax on population health, the measure has led to a steady fall in consumption of sugary drinks since its implementation, and health professionals are hopeful that positive health outcomes will follow.
 
Dr Sturgiss believes that such measures would be helpful in Australia to create a healthier environment for its citizens.
 
‘We’re at a point where we need to start pushing back against the obesogenic environment and putting things in place that make healthy choices more easy for people,’ she said.

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