Sugar taxes don’t work and health troughers are wrong again

Health troughers push the need for sugar taxes.

Boyd Swinburn was accusing Krispy Kreme just the other day about targeting poor people and calling for sugar taxes. He’s one of the biggest advocates for sugar taxes. The problem is that when it is researched, properly, the facts don’t support his claims:

A review of sugar taxes commissioned from NZIER by the Ministry of Health, released this week under the Official Information Act, finds that sugar taxes are unlikely to improve health outcomes.  

The report finds that:

  • No study based on actual experience with sugar taxes has identified an impact on health outcomes.”
  • Studies using sound methods report reductions in [sugar] intake that are likely too small to generate health benefits and could easily be cancelled out by substitution of other sources of sugar or calories.”
  • Earlier studies significantly overestimate the effect of sugar taxes on sugar consumption due to “fundamental methodological flaws,” and these estimates have contaminated later modelling trying to assess the health benefits of sugar taxes.
  • The evidence that sugar taxes improve health is weak.”

The Initiative’s Chief Economist Dr Eric Crampton said: “It is encouraging that the Ministry of Health under the prior National government sought sound independent advice on the effects of sugar taxes.”

He continued: “NZIER’s findings mirror what the Initiative concluded in our 2016 report, The Health of the State. Sugar taxes are administratively burdensome and are unlikely to provide any substantial benefit.”

“I would especially encourage sugar tax proponents to read NZIER’s review. For too long, sugar tax advocates have cast the scientific debate in terms of heroes and villains – the crusading public health protectors against evil companies. It was often insinuated that Minister Coleman’s reluctance to implement sugar taxes was evidence of some conspiracy against the public to protect the industry. This independent report shows that sugar taxes do not stack up.”

The report was produced in August 2017 but only made public on Wednesday after Official Information Act request from the New Zealand Initiative, and after assistance from the Ombudsman’s Office.

Read more:
You can download The Health of the State on our website.

Eric Crampton also blogged:

The NZIER report notes that the Ministry was particularly interested in the evidence around taxes on sugar-sweetened beverages.

The report emphasises that sugar taxes only improve health outcomes through a chain that must hold at every link. Imposing the tax must increase prices; increasing prices must reduce consumption; reducing consumption must reduce energy intake; reduced energy intake must reduce physiological risk factors. 

When NZIER evaluated the literature, they found substantial reason to worry about the chain that leads from taxes to potential health benefits. They find causality hard to determine; problems in estimates of consumption elasticities; difficulty in finding links between taxes and health outcomes; and little work on optimal tax design.

They conclude:

As we noted in the section on frameworks, there are multiple steps in the chain of intervention logic from the well-established principle that an increase in the price of a good leads to a reduction in consumption of that good and, all else equal, to an improvement in health outcomes.

There have been several recent examples of governments imposing taxes on sugar with the intention of improving health outcomes and, thus an extensive literature examining the effects of those taxes.

Our conclusion is that the evidence base gets weaker further along the chain of intervention logic.

If taxes did not have economic costs, through deadweight losses and implementation costs, then even a slight causal link between a tax and an improvement in health outcomes might be justified. That, however, is not the case.

We have yet to see any clear evidence that imposing a sugar tax would meet a comprehensive cost-benefitAnti-sugar campaigners have framed opposition to sugar taxes as reflecting the pecuniary interests or ideology of those opposing those taxes. The evidence instead suggests that those taxes would have little discernible effect on health outcomes and would be unlikely to pass any cost-benefit assessment.

Anti-sugar campaigners not only malign people who oppose them, they also try to sue them into silence.

Poor old Boyd Swinburn. Imagine having to answer questions under examination based on this comprehensive report. A report which comprehensively destroys all his claims and his credibility.


-NZ Initiative, Offsetting Behaviour

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As much at home writing editorials as being the subject of them, Cam has won awards, including the Canon Media Award for his work on the Len Brown/Bevan Chuang story. When he’s not creating the news, he tends to be in it, with protagonists using the courts, media and social media to deliver financial as well as death threats.

They say that news is something that someone, somewhere, wants kept quiet. Cam Slater doesn’t do quiet and, as a result, he is a polarising, controversial but highly effective journalist who takes no prisoners.

He is fearless in his pursuit of a story.

Love him or loathe him, you can’t ignore him.

To read Cam’s previous articles click on his name in blue.