The rising rates of diabetes urge the countries to impose new measures. Governments strive to prevent the population from obesity, therefore they are going to introduce new taxes, The Financial Times writes. According to the article, Hungary is at the front line with putting levy on products containing lots of sugar.

Sugar is the new tobacco,

an executive told to The Financial Times. This trend began six years ago with Hungary putting extra tax on products containing lots of sugar, salt or caffeine. Other countries all around the world are about to impose similar measures, focusing mainly on sugary drinks.
The new enthusiasm for putting extra tax on unhealthy food and drink may be risky for producers, The Financial Times notes. Some compare the current situation of sugary drinks to the tobacco industry: to squeeze consumption, many governments have imposed high taxes or bans on advertising. However, in case of sugary drinks, no serious steps have been taken so far.

According to The Financial Times, the British Institute for Fiscal Studies pointed out that such a large-scale measure would not affect the health condition of people. Costumers would switch to other, untaxed products to consume the amount of sugar they need. The paper argues that it would be reasonable to levy the broader scale of foods and drinks considered unhealthy.

According to WHO, as The Financial Times mentions, Hungary is a success story in terms of encouraging manufacturers to reformulate products in order to make them healthier. A good example for this is the so called “fat tax” because based on a survey conducted in 2012, 40% of the manufacturers reduced the rate of unhealthy ingredients of food as a reaction to the extra taxes. In other words, manufacturers may produce healthier goods in the future.

A research of The National Institute for Health Development has revealed that the measures have reached their goal to some extent: the sales of products considered unhealthy has fallen with 25%, their average selling price has risen with 29%. In terms of consumers’ consumption-habits and lifestyles, no significant break-trough has happened so far. Hungarians choose other sugary drinks, buy preserved fruit jam, and sugary dairy products, cookies and sweets, reports. The experiences of WHO also show similar results. They remind that Hungarians consume half as less sugar than the British, for instance.

The manufacturers could not ignore the measures, notes. They claim that imposing extra tax on alimentations have not produced meaningful positive results. What is more, the extra tax adversely affects consumers with lower income, and employers have to face the risk of terminate their jobs. On the other hand, WHO argues that manufacturers do everything to avoid taxes. If governments levied sugary drinks, many human lives could be saved.


Photo: Daily News Hungary

Copy editor: bm

Source: The Financial Times, Protfolio

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