Soda tax debate: How does it impact the world’s poor?

A Coca-Cola van in Mexico, which enacted a 10% soda tax in 2014. (Credit: David Boté Estrada/Flickr)

The World Health Organization (WHO)’s recommendation for countries around the world to tax soda drinks to fight obesity has been met with debate over whether such recommendations would benefit the poor as the health agency intends.

The recommendations are detailed in a WHO report, which suggests taxing “other foods and beverages high in sugar, salt and fat” up to 50 percent to combat the rising rates of obesity and other diet-related diseases.

The report also urges governments to adopt subsidies to reduce the prices of fruit and vegetables, suggesting that these subsidies and taxes can “create incentives for behaviors associated with improved health outcomes and discourage the consumption of less healthy options.”

“The greatest impact was on lower-income, less-educated younger populations and populations at greatest risk of obesity,” the authors wrote.

According to the WHO, more than half a billion of the world’s adults are now obese, including 11 percent of men and 15 percent of women. Those rates are more than double what they were in 1980. Numerous studies have linked rising obesity to the consumption of junk food, and any health expert would agree that people should avoid an excess of the sugar, honey, syrups and fruit juice concentrates that find their way into soda and processed foods.

But some have noted that in a bulletin published just a few months ago, the WHO was reluctant to say soda taxes had any effect on obesity. “Time will tell whether the tax helps to reduce obesity prevalence as well,” the WHO wrote at the time, of Mexico’s tax on soda products.

“WHO recommends other price policies such as subsidies for, or lower taxation of, healthy food,” the agency wrote, “as well as initiatives to encourage people to eat a healthier diet, avoid tobacco and be more physically active.”

The shift in the agency’s stance has raised some eyebrows. Bernie Sanders and other opponents of the tax argue that the drop in sales of soda and other highly processed products would harm small business and have a disproportionate impact on low-income groups. The International Council of Beverages Association says such taxes pose an unfair burden on poor people and said in a statement that soda taxes were “discriminatory” and too simplistic to address “the very real and complex challenge of obesity.”

“The committee members have lost sight of the real-world implications of these type of recommendations,” the association said. “In Mexico, for example, 10,000 jobs were lost and those who could least afford it carried the burden of the tax, all for a minimal decrease of fewer than 6 calories per day out of a diet of 3000 calories.”

Other arguments against the tax are that the government shouldn’t interfere with citizens’ personal choice of what to eat and drink and warn that officials may not spend the tax revenue the way they say they will.

But many health experts and supporters of the tax rebut claims of the tax’s negative impact on the poor. Such claims are “disingenuous,” according to Jim Kenney, the mayor of Philadelphia, which became the first major U.S. city to pass the soda tax this June.

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“It’s a tax on distributors,” he told Vox. “They can choose not to pass it on. If they chose to – that’s a decision they make as an industry.”

Supporters also point to existing evidence that the tax has already been proved to work. A famous example is that of Mexico – the “fattest country in the Americas” – which enacted a 10 percent tax on sugary drinks in 2014 and saw a 17 percent reduction in soda consumption among the country’s poor.

The tax also seems to be a growing trend in several U.S. cities. Berkeley, Calif., enacted such a tax last year, NPR reported, and so far it appears to be working. Taxes on soda have also reached the national level in Norway, Australia and a handful of other countries, and a spokesman for the WHO, Paul Garwood, told the New York Times that South Africa and Britain may also join the movement.

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Lisa Nikolau

Lisa Nikolau is a Madrid-based reporter for Humanosphere, covering gender equality, indigenous rights and poverty in Latin America and worldwide. Find her on Twitter at @lisanikolau, email lisa.nikolau@humanosphere.org or see her latest work at www.lisanikolau.com