Tax on sugary drinks: Are we being misled?

The fourth episode of the Healthy Living Alliance’s (HEALA) web series, Chew on This, is now available.

Titled Is the Sugar Industry Lying to Us? This episode takes a critical look at the Health Promotion Levy (HPL) on sugary drinks. The HPL was introduced to reduce sugar intake and improve public health, but the episode questions whether the sugar industry has been honest about the levy’s impact on jobs and the economy.

Experts in the episode argue that the levy is vital, especially for communities affected by obesity and diabetes.

Government urged to hike sugar levy to 20%

Experts in the discussion call for the government to increase the levy to the originally proposed 20% and to expand it to cover more sugary products. They point out that, while the HPL has led to reduced sugar consumption, it hasn’t kept up with inflation, which has weakened its effectiveness.

Professor Sue Goldstein, a public health expert, emphasises the importance of stronger policies: “It’s important to have intersectoral public health policies like the HPL, which can prevent the conditions that make people more vulnerable to disease.”

Former Chairperson of the Standing Committee on Finance Yunus Carrim adds: “We can’t afford to let the sugar industry’s influence block the expansion of the levy. It’s crucial that we prioritise the health of South Africans over corporate interests.”

A call to action

Viewers are encouraged to sign HEALA’s petition, urging the government to increase and expand the HPL.

“We need the public to rally behind this. The sugar industry is thriving, but the health of millions of South Africans is at risk,” says Goldstein.

The origins of the HPL

In 2016, the South African government proposed a 20% tax on sugar-sweetened beverages (SSBs).

However, after consultations with industry, the rate was lowered to around 10%. The levy came into effect in April 2018. Studies show it has led to a notable drop in SSB consumption, especially among low-income groups, proving effective in promoting health equity.

The impact of the HPL

Goldstein stresses that the levy has reduced sugar intake. “The most important thing about the HPL is that what we are taxing is something that’s completely unnecessary. There’s no nutritional value in sugary drinks.”

She acknowledges that although the levy was set lower than proposed, it has still reduced sugar consumption. This particularly pertains to vulnerable groups.

“The levy has been somewhat effective, but we need to increase it for it to reach its full potential. Given the rise in obesity and related diseases, strengthening the HPL is crucial.”

Carrim dismisses exaggerated job loss claims

Carrim recalls how, despite industry resistance in 2016, the sugar industry’s fears of massive job losses were exaggerated.

“Despite this compromise, the industry’s claims about massive job losses have always been exaggerated. It’s for the public to campaign like HEALA has done, to take to the streets and put pressure on the government to increase the levy.”

Michael Marchant, head of investigations at Open Secrets, highlighted corruption within the sugar industry. He used the Tongaat Hulett scandal as an example.

“The systematic fraud by executives at Tongaat Hulett, with the connivance of auditors, has caused far more damage to jobs and livelihoods than the sugar tax ever could.”

To watch the full episode and sign the petition, visit HEALA’s website.

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