Fiscal interventions aimed at reducing sugar consumption and improving population diet have become increasingly popular in recent years. In April 2018, the UK government introduced the Soft Drinks Industry Levy which aimed to help combat childhood obesity and related conditions such as diabetes and heart disease. The money raised from the levy was also to be ploughed back into initiatives aimed at improving health in school-age children.

This levy was applied to drinks containing more than 5g of sugar per 100ml, but excluded fruit juice, milk-based drinks, alcoholic drinks, or drinks from companies with sales of less than 1m litres per year.

New research, published yesterday in PLoS Medicine¹, led by Oxford and Cambridge Universities and involving PHI|Lab members Professor Steven Cummins, Dr Cherry Law and Dr Laura Cornelsen found the levy has prompted large-scale reformulation of sugary drinks. We found that very few eligible drinks, just 15%, were still liable for the levy by February 2019 compared to the 52% of eligible drinks liable for the tax prior to implementation.

After the announcement of the levy the percentage of drinks liable for the levy began to reduce faster than the background trend. For example, if the trend had continued, by February 2019, 49% of drinks would still have been eligible for the tax, rather than the 15% actually seen. The biggest changes in drink formulation happened just before the implementation of the levy. In the 100 days either side of the implementation date (6 April 2018), 11% of the eligible drinks changed sugar content so that they were not liable.

Price analysis showed that, for branded drinks, around half of the levy was passed onto consumers in higher prices of drinks in the higher levy category after the introduction of the levy, while lower levy drinks reduced in price.

This research suggests that taxes and levies can be used to improve the healthiness of food, and that they have a bigger influence on the food industry than purely voluntary measures, such as the government’s public health responsibility deal, or other non-fiscal interventions such as food labelling.

Importantly the levy is currently only applied to a relatively small proportion of soft drinks, which gives a large amount of policy headroom for extension to other sugary drinks that are currently exempt, such as milk-based drinks.

Additionally, previous research published in the BMJ by Laura Cornelsen and others² has suggested that extending taxes and levies on sugar to sweet snacks such as confectionery could reduce sugar consumption at an even faster rate. Our research suggests that in the UK policymakers should now consider whether to extend the use of fiscal levers as a safe and effective way of improving population diet.

References:

1. Scarborough P, Adhikari V, Harrington RA, Elhussein A, Briggs A, Rayner M, Adams J, Cummins S, Penney T, White M. (2020) Impact of the announcement and implementation of the UK Soft Drinks Industry Levy on sugar content, price, product size and number of available soft drinks in the UK, 2015-19: A controlled interrupted time series analysis. PLoS Med 17(2): e1003025. https://doi.org/10.1371/journal.pmed.1003025
2. Scheelbeek P, Cornelsen L, Marteau T, Jebb S, Smith R (2019) Potential impact on prevalence of obesity in the UK of a 20% price increase in high sugar snacks: modelling study BMJ 366:I4786 https://doi.org/10.1136/bmj.l4786