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Study: Sugar tax hurt by failure to link it to health promotion

Out of favour: the popularity of sugary drinks declined following the introduction of a tax, according to a survey (Photograph supplied)

A controversial tax on products containing sugar forced almost half of respondents to reduce their consumption of sugary goods and drinks, according to an academic study.

But the levy still netted the Government millions of dollars in revenue.

The tax was introduced by the Government in October, 2018 to reduce sugar consumption and obesity.

According to a study released this week, 48 per cent of 400 respondents said that they had cut back on sugar consumption after prices went up.

The survey, written by Imperial College London, researchers and published by BMC Public Health, also suggested that a large proportion of the population was aware of the new tax – but did not approve of it.

A report summarising the results said: “General population respondents had high awareness of the sugar tax – 94 per cent -- but low awareness of the healthy food subsidy – 32 per cent.

“Most respondents – 67 per cent – felt the tax was not an appropriate way to motivate healthier consumption due to beliefs the tax would not be effective and because of the high price of healthy food. However, nearly half – 48 per cent – reported consuming fewer taxed products, primarily for health reasons but also motivated by price increases.”

Researchers, who used Bermuda Omnibus Survey results as the basis of their research, pointed out that opposition to the tax could have been reduced if consumers believed that revenues would be spent on health-related issues.

One of the main researchers, Kelsey Case, who also conducted direct interviews for the study, is a Bermuda resident and a public health researcher at Imperial College.

The report said: “Acceptability of health taxes is also influenced by how tax revenue is used. Greater public acceptability of sugar sweetened beverage taxes has been reported when revenue generated is used for public health, or when there is transparency between taxes and the purposes they intend to serve.

“Health taxes without transparency of the primary goal are particularly vulnerable to criticism. The Bermuda sugar tax has been very successful in generating revenue – $4.7 million in 2019.

“However, despite being promoted as a public health measure, the revenue raised from the sugar tax contributed to the general tax fund without earmarking for health. Informants were unaware of use of tax revenue for health purposes, or new health initiatives born out of the revenue generated. This affected perceptions of the tax with informants questioning whether the sugar tax was primarily financially motivated but promoted as a public health initiative.

“The intended use of tax revenue reportedly changed during policy implementation, going from use for specific health initiatives to use as general tax revenue.

“Countries designing similar policies should consider that public support for a new tax can be boosted if there is a strong link between the tax aim and use of revenue.”

The report also suggested that health benefits could have been increased if the tax had been backed up by education programmes.

It concluded: “The use of economic tools to incentivise consumption behaviours is a policy intervention recommended to promote healthy diets and reduce obesity.

“However, motivating dietary change will require comprehensive tax policies which incorporate education and health promotion and support healthy food environments, including the increased availability and affordability of healthy substitutions.

“The Bermuda sugar tax was implemented without these complementary components, which may limit the potential health impacts of the tax.”

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Published August 17, 2022 at 7:44 am (Updated August 17, 2022 at 7:44 am)

Study: Sugar tax hurt by failure to link it to health promotion

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