Tax on sweet drinks may boomerang, says expert

The taxing of sweetened beverages could have unintended consequences as consumers may want to stick to the same drinks but cut out healthy foods and drinks to save costs, an expert has said.

Leading statistician Garth Zietsman, quoted by Free Market Foundation (FMF) yesterday, said: “People may choose not to reduce the consumption of soft drinks in response to the tax, but save by eating less healthy food and drinks.”

Zietsman said consumers may also switch to other sources of cheap sugar. “Economics has documented many such cases of human behaviour,” Zietsman said.

The Free Market Foundation said the taxing of sugar and other “sinful products” is a blunt instrument to divert attention from government’s desire to control ordinary people’s lives and to raise revenue by any means possible.

The foundation opposed the government plan to tax sweetened beverages due to possible job losses and the fact that the government was trying to control people’s individual freedom.

“The true unhealthy appetite belongs not to those consumers of sugar threatened with another undeserved tax, but the taxer,” the FMF said.

The taxing of sweet drinks raised an outcry among trade unions and community organisations. Union federation Cosatu, the newly formed SA Federation of Trade Unions and the ANC Women’s League lashed out at the government decision saying it put tens of thousands of jobs at risk.

The FMF opposed a sugar tax since it was first conceived and championed by Health Minister Dr Aaron Motsoaledi.

“The FMF opposes this tax on the same logic as any other kind of tax. Taxes increase the cost of living for consumers, especially the poor, and place strain on employers, leading to job losses.”

It said the sugar tax violates the personal freedom of South Africans and that more and more stuff may be taxed in future.

“A tax on sugar will erode our personal freedoms. Yesterday it was tobacco, today it may be sugar, tomorrow it could be restrictions on how loud you play your iPod … Choices will no longer be yours – all in the name of your health.”

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