July 23, 2015 Print

In order to clarify false information recently made by campaigners for a new sugar tax in New Zealand, Atlas Network partner the New Zealand Taxpayers’ Union has released a report aimed at correcting these claims. Titled “Fizzed Out: Why a Sugar Tax Won’t Curb Obesity,” the report takes a detailed look at the purported effectiveness of sugar taxes in curbing obesity and examines why sugar and other food taxes don’t work.

Auckland University’s public health activists argued in their own report that Mexican sales of sugar-sweetened beverages have decreased since the introduction of a sugar tax. The New Zealand Taxpayers’ Union countered this claim with Nielsen sales data that proved sales have not moved, nor has consumption decreased. Furthermore, Auckland University’s report argued for a 20 percent flat tax rate on many staple foods (like bread, cheese, and eggs) and said that “Maori and low-income New Zealanders are most likely to benefit from these policies.” Certainly, raising taxes on staple foods in addition to sugar-sweetened products could not possibly make food more affordable for the poor.

“What is not a prediction is that slapping taxes on will not change people’s eating or drinking habits unless those taxes are very high,” New Zealand Food and Grocery Council Chief Executive Katherine Rich explained in a press release cited by the New Zealand Taxpayers’ Union. “This has been proven around the world. What would be very real would be higher food costs for all New Zealand families due to the relatively inelastic demand for important staple foods.”

Disproving the claims of Auckland University and other proponents of a sugar tax, the report released by the New Zealand Taxpayers’ Union included these key findings:

  • Only 1.6 percent of New Zealanders’ total energy intake comes from the added sugar content of sugar-sweetened non-alcoholic beverages.
  • New Zealanders’ consumption of sugar-sweetened beverages is already trending downward, despite the lack of a sugar tax.
  • New Zealanders are still getting fatter despite consuming fewer calories, suggesting that they are not burning as many calories.
  • Sugar taxes hurt the poor and do not result in the decreased consumption that tax supporters claim.
  • Similar taxes overseas have not worked (e.g., in Mexico).

“A sugar tax is attractive to politicians because it allows them to engage in mass pick-pocketing with a sense of moral superiority,” wrote Christopher Snowdon of London-based Atlas Network partner the Institute for Economic Affairs (IEA), in his foreword for the report. “It is not good enough to say that anything is worth a try in the campaign against obesity. A policy that is known to incur significant costs without reaping any measurable rewards is a policy that should be rejected.”

Read “Fizzed Out: Why a Sugar Tax Won’t Curb Obesity.”

Read “First Sugar Taxes, Now Meat, Dairy, And Even Bread.”