Unintended Consequences: The Economic Impact of the Sugar Tax on Small Stores and Bakeries in Mexico

Unintended Consequences: The Economic Impact of the Sugar Tax on Small Stores and Bakeries in Mexico

(originally published on 4 January 2017, The Diplomatic Courier)

The Diplomatic Courier published an article on economic impacts of the sugar tax on small businesses in Mexico on 4 January 2017.

The article discusses negative economic consequences of the beverage and food tax, introduced in 2014, on small businesses around Mexico.

Read the full article here:

http://www.diplomaticourier.com/2017/01/04/unintended-consequences-economic-impact-sugar-tax-small-stores-bakeries-mexico/

A global anatomy of health and the workday lunch

A global anatomy of health and the workday lunch

(originally published on 14 September 2016, The Financial Times)

The Financial Times published an article on assessing the state of the workday lunch around the globe in Paris, Tokyo, Mexico City and Nairobi on 14 September 2016.

The article discusses social, dietary and health implications of the main break of the day, the workday lunch, which is often squeezed by work pressures and high costs. However, in this scenario, cultural habits play an indispensable role and vary across French, Japanese, Mexican and Nigerian cuisines.

Read the full article here:

https://www.ft.com/content/a1b8d81a-48f5-11e6-8d68-72e9211e86ab

Soft Drinks Tax: is the UK moving in the right direction?

Soft Drinks Tax: is the UK moving in the right direction?

Christopher Snowdon on The Spectator highlights the counterfactual evidence against the three main claims used by the UK Treasury to justify the introduction of a of the Soda Tax in 2018, as announced by former chancellor George Osborne earlier this year.

According to the Treasury’s the tax will only affect corporate profits, not consumers; yet the author contends that consumers, not companies, will be the most affected. While he recognizes that companies are not forced to raise the prices of their products, he points out that the national Office for Budget Responsibility (OBR) expects the levy “to be passed entirely on to the price paid by consumers”.

The second claim is that the tax will incentivise large-scale sugar reduction in soft drinks; Snowdon denounces that “the government has picked on the one part of the food and drink industry that has undergone extensive reformulation and told them to somehow do it all over again”. He argues that the soft-drink industry already provides low and no-calorie alternatives of their products, suggesting there is little room left for further reformulation. The amount of sugar consumed through beverages solely depends on consumers’ preferences.

The third claim presents the tax as the best way to raise money for anti-obesity initiatives. According to the OBR the levy will raise £500 million a year, yet it requires a cost of £1 billion for its implementation alone, enforcement costs and the rise of index-linked salaries, benefits, and public sector pensions are on top of that. Phil Wadsworth, chief actuary at JLT Employee Benefits, estimates that the sugar levy will add £3 billion to UK pensions liabilities. Snowdon warns that any revenue generated by the levy will have no other purpose than to cover its costs for many years to come.

Snowdon concludes with an appeal “the sugar levy aims to do something that has already been done (reformulation of soft drinks) with a tax that will lose the government money… a rethink is urgently needed”.

You may find the original article on The Spectator website

The Netherlands: wide political consensus against sugar tax

The Netherlands: wide political consensus against sugar tax

A broad consensus against the introduction of a sugar tax in the Netherlands has emerged from parties across the political spectrum.

Asked about their position on the issue following the debate in the UK, some Dutch politicians expressed opposition to changing citizens’ behavior through taxation: “People should decide for themselves what they eat and drink“, said Erik Ziengs, from the People’s Party for Freedom and Democracy (VVD). A view shared also by Reinette Klever, Member of the Dutch House of Representatives for the Party for Freedom (PVV), according to whom a sugar tax would be “patronizing“. Others, like Hanke Bruins Slot of the CDA (Christian Democratic Appeal), stressed that Sugar is a natural product”.

The Socialist Party, which is working towards less sugar and salt in products, has ruled out taxation as an effective measure, preferring instead to push manufacturers to use less sugar and salt.

More strikingly, even parties in favour of a sugar tax like the Labour Party (PvdA) do not have a clear proposal on how to make it technically feasible. “It would mean a lot of hassle”, admitted Ed Groot, Member of the Dutch House of Representatives for the PvdA.

The full article (in Dutch) can be found at: http://www.telegraaf.nl/binnenland/24811269/__Suikertaks_niet_in_zicht__.html

UK Sugar Tax may aggravate the struggle against diabetes

UK Sugar Tax may aggravate the struggle against diabetes

An article from the BBC warns the public about the collateral effects of the UK sugar tax, announced by the Government this March it should see daylight starting April 2018.

According to the UK’s own national broadcasting service the Government’s new measure will negatively impact a share of the British population that already struggle with a life-threatening condition: type 1 diabetes. People affected by type 1 diabetes are at risk of suffering from complication due to hypoglycemia, an insufficient level of blood glucose, which can lead to a diabetic coma. To prevent this from happening diabetics compensate by increasing their intake of sugar; the BBC reports that typically this is done by consuming sugary beverages.

The interviews conducted by the BBC and reported in the article cast a light on the detrimental impact of the tax on the purchasing power the families of diabetics. As a concerned parent commented «the sugar tax will mean keeping my son alive just got a lot more expensive».

The chief executive of Diabetes UK Chris Askew voices the widespread concern among diabetics about the sugar tax, stressing that the introduction of the measure in its current form will «adversely impact on the way people manage their condition» and reminding that type 1 diabetes «is not linked to lifestyle and cannot be prevented».

You may find the original article on the BBC website.

UK “anti-consumer” Sugar Tax could cost £1 billion to set up

UK “anti-consumer” Sugar Tax could cost £1 billion to set up

In a recent article Brook Whelan from the Huffignton Post takes a closer look at the effects on the UK economy of the freshly brewed “sugar tax”, which was designed and announced by the British Government on March 16 2016 and should be put in place two years from now, in April 2018.

Whelan describes the tax as an « anti-consumer and anti-business » measure. Although he recognizes obesity to be an issue of concern, he argues that in its current form the tax is just a “gimmick” that fails to address the problem. On top of that he criticises the measure for curbing the consumer’s’ freedom of choice.

Whelan estimates that the set up costs of a sugar tax would constitute a £1 billion burden on the state finances, a « scandal » and a « complete shambles » he says, asserting that the money could be better spent elsewhere in the health service.

The articles concludes with an appeal to Chancellor Osborne and the Government to do a U-turn and scrap the tax before its implementation, recalling the pastry tax precedent.
The original article is available on the Huffington Post website.