Tax Sugar? How about getting some facts right first

Tony Falkenstein, who ironically sells water to Kiwis, wants to tax sugar and fat as a way fo tackling obesity.

Unfortunately his article is almost totally wrong in fact and in direction.

His suggestion that we tax sugar is so wrong medically as to be funny, MacDoctor explains:

Fast forward to the present day and most OECD countries have no shortage of food at all. In addition, carbohydrates are the easiest energy source to produce and therefore the most abundant in the types of food we eat.  Worse, most carbohydrates are in a form that is readily metabolised straight to glucose (so-called high glycaemic index food). Should you have the gene for insulin resistance your sugar levels will gradually rise as your poor pancreas tries to cope with the sugar load. Eventually the pancreas loses the fight and you develop diabetes (note: not everyone with this gene will develop diabetes)

Immediately one can see the absolute pointlessness of a sugar tax. Potatoes, white bread, rice and pasta become sugar in the body as fast as pure cane sugar and nearly as fast as glucose powder. Taxing sugar is like sticking your finger in the dyke when the tsunami alarm has just gone off. And taxing carbohydrates in general is just adding a tax to nearly all food.

It is the combination of plentiful food and high levels of easily accessible cheap carbohydrates that has produced both the diabetes and the obesity epidemics. This is unlikely to be easily changed because plentiful, cheap food is a GOOD thing, despite the few disadvantages. There is no famine in New Zealand and even the poorest of people should not go hungry (some, of  course, do, but that is not usually due to food being unobtainable).

Falkenstein then also compares sugar to tobacco. The MacDoctor tears that apart as well:

Mr Falkenstein suggests we are all addicted to sugar in the same way that people are addicted to tobacco. This is a very poor analogy. We are wired to like the taste of fats and carbohydrates in our basic genes because these are the high-calories foods we need to consume in order to survive. We are not in any way wired to like burning tobacco. While I have some sympathy for the view of Mr. Falkenstein that the health industry uses false advertising techniques similar to the tobacco companies, I should point out that Mr. Falkenstein himself in the CEO of a bottled water company, surely the biggest health con of the lot!

Be that as it may, the food industry in general is merely responding to what people like to eat. We want tasty fats and carbohydrates. Therefore, that is what they provide and advertise. Unlike, tobacco, which requires a certain amount of peer pressure and brand-generated desire to produce a habit, the food industry merely has to produce something appetising. The product will then continue to sell itself.

If Falkensteins proposals were looked at for implementation, probably by idiots like the Labour party then what would be taxed:

 What we should be looking at with a critical eye is exactly what would be taxed in this regime proposed by Mr Falkenstein, because we are not simply talking about candy bars and coke.

  • Honey 80% sugar
  • Packet mixed nuts and raisins 27% (without raisins 5%)
  • Tomato sauce 16% sugar (Baked beans 8.2%)
  • Fruit juice 10.4%
  • Peanut butter 5%
  • Milk 4.2%
  • Bread 2%
  • Packet of Pringles 1%

Now, when you can explain to me how a packet of Pringles in a child’s lunchbox is somehow better than a packet of nuts and raisins, I will agree that a tax on sugar is a good thing.

Falkenstein also suggests a tax on fat, without going into too much detail on that, since he didn’t, that is the dumbest idea of all. If we want to look at taxing anything in a bid to halting obesity it should be wheat.

  • Anonymous

    In pre GST days there was apparently a sales tax on sugar – and hence presumably on products where sugar was purchased for manufacture. Also at that time the sales tax on a bottle of soft drink was greater than duty on the same amount of beer – the ‘workingman’s beer’ being rather a sacred item especially since the 1957 Black Budget.

  • Ricardo

    Mr Falkenstein sell bottled water, for God’s sake! What a waste of money, when we have probably the safest, cleanest municipal water supplies in the world. I have no respect for the opinion of someone with business ethics such as his. Mind you the people who buy his water are probably just as stupid.

  • Anonymous

    I often ask my friends who support this thing two questions:

    1) What will charging me more to buy foods with sugars (along with the explanation that all carbs are sugars) do to my personal best lifts at the gym, and how will they make people who are currently inactive become active? 

    2) Why should a long-distance runner, who will go through two or three dark chocolate bars on a decent training run be taxed at the same rate as a fat lout who can’t walk to the fridge without getting chest pains? 

    I am yet to hear an answer to either. 

  • http://www.solopassion.com/blog/966 Mark Hubbard

    The most important point,  though, is this is not a ‘health’ issue, it’s a philosophical issue about the politick. Taxes are only to fund government for those activities that are within the proper purview of government; using tax to influence lifestyle choices, and the products of producers, is government meddling in the lives of individuals, where it has no right to be. Plus using the tax system to socialise the effects of obesity, will only add to the obesity problem, just as welfare begets welfare. I blogged on Falkenstein’s article here.

  • Thorn

    Are all Kiwis equally obese. or just the same group who are over-represented in all things dysfunctional?

  • Tristanb

    The bullshit marketing by water bottling companies is what needs regulation.

    Ever seen a landfill? It’s full of old water bottles. How disgusting when we get water better than 99% of the world’s population drinks to shower in.

    Here’s some picture’s I’m sure Tony would like to have taxed:
    Tony Falkenstein
    Tony Falkenstein for Google
    Just Water International

    I’ve read on water bottles, from water that is basically tap water evaporated in a giant energy consuming factory, that it “stimulations the natural actions of clouds and the water cycle”. I’ve read on water bottles that is basically bottled from the same reservoirs as our tap water “bottled amongst natural scenery”. The “contaminants” that luddites complain about when it comes through the tap are called “essential minerals”.

    Plus there’s all the all ladies sent into heart failure and hyponatraemia from that myth about drinking 10 bottles of water a day for good health. That lie was made up. If you’re a healthy person on no medications, if you need water you’ll feel thirsty.

    Don’t attack the sugar industry when you work for one that is a hell of a lot more destructive.

    • Tristanb

      Okay, didn’t you used to have an edit button?

      * Delete the apostrophe in pictures
      * “I’ve read on the marketing blurb on the side of the bottles
      * “Simulates”, not “stimulations”
      * All the “all ladies” should read “old ladies” (and this is not related to my previous mistake!

    • aobugs

      “If you’re a healthy person on no medications, if you need water you’ll feel thirsty.” Thats not strictly true. Most of us are “dehydrated”, (ie generally we all should be drinking more water than we are), and if you are thirsty, it is your bodies way of saying you are too far behind the fluid balance. However I agree, from the tap is a blody good option.

  • Gazzaw

    Falkenstein speaks with forked tongue. Of course he wants a sugar tax – it won’t apply to his own company’s fancily packaged water but it will apply to the vast majority of competitive products eg soft drinks & fruit juice.

    Add breakfast cereals, chocolate & biscuits to your list of products that would be affected by a sugar tax.

    Fortunately there would be enough multinationals to have his suggestions nubbed right in the bud. Katherine Rich could maybe start by having Falkensteins products removed from supermarket shelves.  

  • Km

    Wheat is one of the real culprits. You should do a blog post about that.

  • Anonymous

    Remember the pure natural spring water that was found to be straight from the tap, using Onehunga water supply? Anyway, never spent a cent on bottled water in NZ and never will. I also live in Bangkok and of course we only use bottled water or filtered water for drinking. Cost for 10 litres from a machine is 5 baht, about 20 cents. Mug Kiwis for buying it in NZ. (also Heineken  beer here at a restaurant is about 20% of the price of the same thing at a restaurant in NZ.) Only way to avoid rip offs in NZ is not to buy the stuff.

  • Guest

    Some response is needed. Visit an acute dialysis ward, some of the patients look like they’ve eaten their way there. At $650 per day, 4 days a week required, with the demand increasing exponentially this is a problem set to swamp the health system.

    Influence surely is needed where people are inherently unable to make lifestyle choices that don’t end up in a massive expense on the taxpayer.

  • Anonymous

    “We now have two newer addictions – sugar and fat. These are the major
    cause of Diabetes 2, which is responsible for the biggest percentage
    increase in our health budget.

    Introducing a tax on them will not only reduce these addictions, but provide funds to handle the increasing cost of them.”

    Well this assumes that the public should continue being responsable for the health care of the irresponsable. How about we have a discussion about requiring people to carry their own health insurance? Then the fatties can pay for thier excessive lifstyle through their insurance premiums without effect those who look after themselves.

    • Ploughman

      Perhaps this is a good idea.  It would be much better than the nanny state system we have now which is not working and is running out of cash.  I am very keen on user pays being the basis for charging, but there is no hope of getting such a sensible and morally justifiable policy adopted in our society. 

  • Tony Falkenstein

    Thanks for all your helpful comments.  To respond to the main criticisms:
    1. “Self interest” – nothing to gain for Just Water – we supply water only in 15 litre polycarbonate bottles (which are recyclable and after 7 years useful life and are used to make road cones). Proud that we have a mission “enhancing lives” – could Coke or McDonalds or KFC ever have that mission?
    2.  ”Nanny state” – is it better to pay minimal tax now at the top of the cliff, rather than a large tax at the bottom?
    3.  ”More tax” – food and beverage companies will quickly comply to the no tax, reduced sugar, product, including tomato sauce and fruit drinks.
    4. “Sugar in veges” – tax would only apply to processed foods
    Tony Falkensteiin

  • Ploughman

    Thanks for that Tony, but there are two main difficulties with laws such as the one you propose.  
    1.  The difficulty in defining boundaries.  In your case what is a processed food?  The processes food undergoes may include: washing (often with antioxidants added, such as citric acid) , peeling or steam peeling, cooking or blanching, freezing or drying, packaging, and further processing.  Additives can be added at any point in any step of this process chain, so the addition of additives doesn’t work to differentiate processed from non-processed.
    2.  It encourages government to interfere with the harmless behaviour and choices of citizens. It is a nanny law with inherent moral judgements made by people who have no right to exert moral judgements and precepts.  These laws are very dangerous - even the most innocent of them.  State interference is common in autocratic governments and autocratic governments are bad and do bad things.  Don’t encourage them.  Educate the consumers so they know the consequences.  After that it’s up to them.

    Incidentally, blanket price increases tend not to deter consumers.  Look at the stats on why people give up smoking, and see how many succeed.  

    And sugar isn’t the only culprit.  Any food carbohydrate will be broken down to simple sugars during digestion, so the bun is as bad as the icing yet only the icing or an iced bun  would be taxed whereas a plain bun wouldn’t?

    As to your product – good luck but I think people who buy it are suckers.