Sugar tax shows sweet results in cutting obesity and diabetes rates

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A recent study published in The American Journal of Clinical Nutrition discusses possible associations between the national taxation of sugar-sweetened beverages (SSBs) and lowered rates of adverse health outcomes.

Study: National taxation on sugar-sweetened beverages and its association with overweight, obesity, and diabetes. Image Credit: Brent Hofacker / Shutterstock.com Study: National taxation on sugar-sweetened beverages and its association with overweight, obesity, and diabetes. Image Credit: Brent Hofacker / Shutterstock.com

Efforts to reduce SSB consumption

The consumption of SSBs or soft drinks has significantly increased throughout the world over the past several decades. This has been associated with rising rates of weight gain, a higher risk of obesity, type 2 diabetes, and heart disease, as well as a higher risk of cardiovascular disease and mortality if consumed over the long term.

Previously, the Global Burden of Disease study showed that deaths linked to soft drink intake rose between 1990 to 2019. This was accompanied by a rising number of disability-adjusted life years (DALYs) and the number of years lived with disability, the latter of which doubled during this period.

In 2009, the American Heart Association (AHA) suggested that added sugars should not exceed 100 and 150 calories each day for females and males, respectively. The World Health Organization (WHO) also limits daily free sugar intake to less than 10% of daily energy intake.

Many countries have imposed a tax on SSBs to raise revenue and limit their consumption. Some research shows that when the price of SSBs increases by 20%, their consumption may decline to similar levels. However, this prediction has not been supported by any study on global SSB consumption in relation to national tax policies and population health impact.

The current study aimed to summarize national taxation policies on SSBs throughout the world and estimate the impact of tax laws made after 1990 on population-level metabolic parameters like obesity and type 2 diabetes.

What did the study show?

Since 1990, SSB taxation has occurred in 53 countries, 24 of which were high-income countries (HIC), whereas 18 and 10 were upper-middle-income and lower-middle-income countries, respectively. Rwanda was the only low-income country to impose SSB taxation.

All but eight of the laws were implemented after 2000. In 15 countries, laws changed the tax amounts over time.

Most of the analyzed laws were a single amount based on the volume of the product, whereas a minority were based only on the sugar content of the beverage. The remaining laws were ad valorem taxes and imposed according to the product's value.

The lowest and highest taxation per volume of the product was for Vanuatu and Thailand, as compared to Tonga and Norway, respectively. Median tax amounts in both purchasing power parities (PPPs) and United States dollars (USD) were about 0.3 and 0.16, respectively, per liter. For HICs, median tax amounts in PPPs and USD were 0.25 and 0.2, respectively, compared to 0.356 and 0.17 for lower-middle-income countries.

Some countries taxed SSBs based on the sugar content per gram of sugar for all SSBs. Comparatively, in France, SSBs were taxed for every kg of sugar plus per liter if a product had over 15 kg of sugar per 100 liters.

The median ad valorem tax amount for HICs was 50% compared to 10% and 340% for upper and lower-middle-income countries, respectively. Although a low-income country, Rwanda also had ad valorem taxation on SSBs.

Only one country, Hungary, showed a significant reduction in the slope of overweight prevalence after taxation was implemented. However, a slowing trend was observed in Paraguay.

Obesity rates declined in Brazil, Hungary, and Panama, with slowing trends observed in El Salvador, Honduras, and France. A significant reduction in obesity levels was observed in Panama and Paraguay following taxation.

Diabetes prevalence also declined in Hungary after the tax was introduced, while Finland and Guatemala showed a reduction in the slope. Honduras, Hungary, and Fiji also exhibited slowing post-taxation trends.

Similar findings were observed among children and adolescents. Samoa was associated with reduced overweight individuals, whereas five countries, including Brazil, Palau, and Samoa, showed a slope reduction, with post-intervention slowing trends observed.

The prevalence of obesity declined after taxation in El Salvador, Uruguay, and Tonga, whereas slope reductions were observed in Nauru, Palau, and Tonga. Slowing trends were observed in four countries, including Brazil and Uruguay.

Overall, ad valorem taxation was associated with larger slope reductions for diabetes among adults as compared to amount-specific taxes. However, the change in the slope of obesity among adults was associated with the year of tax implementation. Slope reductions for overweight children and adolescents were observed in upper-middle-income countries.

What are the implications?

The evidence that taxation of SSBs was associated with health-related outcomes like diabetes, overweight, and obesity was stronger among children than adults. Previous studies showed stronger correlations among adults than observed in this study; however, similar results were observed among children. Of 17 countries reporting level or slope changes, most exhibited a change associated with one or more indicators for one or more population groups.

SSB taxation could be an effective policy intervention to improve the population's health."

The variation in tax design could be partly due to the imbalance in the number of countries in each group, with amount-specific taxes more common. Limited data availability after the introduction of taxation may have skewed the results, along with too short a period of observation.

Taxation on a food product may convey negative sentiments to consumers; however, this effect was not studied in the current study. Reverse causality must also be excluded since, if SSB consumption was already declining, taxation might have become feasible without the fear of political losses.

There is a need to identify factors that predict the effectiveness of taxation as a strategy to reduce SSB consumption and improve related health outcomes at various levels. Other public health strategies should be simultaneously applied, especially education about the adverse effects of SSB consumption and behavioral interventions to break unhealthy consumption patterns.

Journal reference:
  • Sassano, M., Castagna, C., Villani, L., et al. (2024). National taxation on sugar-sweetened beverages and its association with overweight, obesity, and diabetes. The American Journal of Clinical Nutrition. doi:10.1016/j.ajcnut.2023.12.013.
Dr. Liji Thomas

Written by

Dr. Liji Thomas

Dr. Liji Thomas is an OB-GYN, who graduated from the Government Medical College, University of Calicut, Kerala, in 2001. Liji practiced as a full-time consultant in obstetrics/gynecology in a private hospital for a few years following her graduation. She has counseled hundreds of patients facing issues from pregnancy-related problems and infertility, and has been in charge of over 2,000 deliveries, striving always to achieve a normal delivery rather than operative.

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