“Soda tax” could help tackle obesity, says US director of public healthBMJ 2009; 339 doi: https://doi.org/10.1136/bmj.b3176 (Published 04 August 2009) Cite this as: BMJ 2009;339:b3176
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Free market economics alone seem insufficient to prevent the relative
affordability of less-healthy over more-healthy foodstuffs(1).
Value added is the increase in value between ingredients and product
and so is limited in products with less changes between ingredient and
customer. In an apple, for example, this is the small premium paid to get
it to our local store.
However, products that have been extensively processed have a large
amount of value added, i.e. the difference between the cost of a can of
fizzy pop and the almost negligible cost of ingredients (water/glucose
syrup/carbon dioxide). This profit allows the manufacturer of the more
processed foods not only a greater scope to promote, place and market
their goods but also to lobby against changes to the status quo.
VAT allows the UK government to extract a proportion of the sales
price of an item but recognises that some products are of sufficient
necessity to the consumer that they are zero-rated – in this case most
foodstuffs(2). However, some ‘luxury foods’ are still taxable, and this
already includes carbonated drinks (as well as pure fruit juices).
There is more complexity in the classification of ‘healthiness’ of
foods than, say, cigarettes (which are almost entirely unhealthy), and
this is illustrated in the existing tax laws where, famously, chocolate
digestives are taxed but Jaffa Cakes are not.
A public health measure that redresses this balance of power is
welcome, but it is reasonable to assume that it will be hard to implement
and be robustly fought by the manufacturers of processed foods.
(1) Roehr B. US Soda Tax could help tackle obesity, says new director
of public health. BMJ 2009;339:b3176
(2) HM Revenue & Customs (2004) VAT Liability Law, Notice 701/39
Competing interests: No competing interests