Australia should follow Mexico's lead and investigate tax on soft drinks and junk food

6 Nov 2013

As Mexico enters the final stages to introduce a tax on sugary soft drink and junk food, new public opinion data reveals Australians are also in favour of pricing interventions to improve health, with more than two thirds (68%) in support of increasing the price of unhealthy foods and using the money to reduce the cost of healthy foods.

In Mexico, a bill imposing an eight per cent tax on high calorie food and a tax of one peso per litre of sugary soft drinks has progressed through the Mexican congress. A 20% tax on sugar sweetened drinks was estimated to reduce the number of obese adults in the UK by 1.3% or 180,000 people and the number who are overweight by 0.9% or 285,000 people.

The Obesity Policy Coalition-commissioned survey of over 1,200 Australian adults in 2012 confirmed that a tax on soft drinks to help reduce the cost of healthy food for people on low incomes was supported by two thirds (64%) of those surveyed, including 42% strongly in favour.   Further, more than half (57%) of respondents were in favour of a tax being imposed on junk food if the funds raised were spent on health programs, as is the plan for Mexico.

According to Jane Martin, Executive Manager of the Obesity Policy Coalition, the results highlight the broad support for a range of interventions including price levers, and demonstrate acknowledgement that overweight and obesity is a growing health issue in our society and must be addressed.

"More than 60% of Australian adults and 25% of children are currently overweight or obese, and we know that sugary drinks and other high-energy, nutrient-poor products are a major contributor to the problem," said Ms Martin.

"Public approval of a tax on unhealthy foods or soft drink is already similar or stronger than the public approval of tobacco taxation policies at the time they were implemented.

"We know with other public health issues, such as tobacco control, price can be an effective deterrent when applied to products which result in risks to health. Aggressive pricing strategies from soft drink manufacturers means sugary drinks are often cheaper than bottled water or milk," she said.

"We believe using tax to increase the price of sugar-sweetened soft drinks and junk food should be investigated in Australia as part of a comprehensive approach to the obesity problem. We would also suggest investigating the potential for revenue raised to be used to off-set the cost of healthy food for those on low income. If people then chose the healthier alternatives, in this model, their grocery bills could in fact become cheaper."

Soft drink and junk food companies invest enormous amounts of money in marketing their products, particularly to children and young people. In Australia in 2009, Coca Cola brands spent $29.6 million on media advertising, PepsiCo spent $12.3 million and Schweppes $10 million.

"If people can be encouraged through education, price and availability, to choose healthier options which may prevent them from developing serious health issues associated with overconsumption of sugary drinks and highly processed foods, then that can only be a good thing," said Ms Martin.