Intended for healthcare professionals


Taxing unhealthy food and drinks to improve health

BMJ 2012; 344 doi: (Published 15 May 2012) Cite this as: BMJ 2012;344:e2931

Re: Taxing unhealthy food and drinks to improve health

Price Instruments for Nutrition Policy

In their article on “health related food taxes”, Mytton and colleagues make an important contribution to nutrition policy. They thoroughly review existing examples and recent proposals. They record the small scale of current taxes, too low of affect demand. They dissect many of the limitations in the methods that underlie arguments for new taxes. They are uncommonly candid in acknowledging that such taxes have limited, even negative, effects.

All this is valuable. Prolonged efforts to educate consumers to “informed healthy choices” have failed. In country after country, people grow fatter and fatter. Against that background, price instruments -- incentives as well as penalties -- could play a key role in reforming unhealthy diets. They need serious public debate. The rigour of this analysis is a corrective to the recent enthusiasm of many, that taxing “bad” foods is a panacea.

Sad, then, that the authors do not follow their analysis to its logical conclusion. Instead, in the three-sentence conclusion, they hop on the bandwagon, proposing their own tax, just a bit larger. It is unlikely to ever be adopted and would be ineffective if it were.

The principal tax they discuss, and on which most evidence exists, focuses on sugar/soft drinks. The first detailed proposal for such a tax in the UK, based on British data, was published just months ago (1). It showed that a 10% tax would only reduce soft drink consumption by 7.5ml/pp/pd –- less than a sip (2). With the authors’ proposal for a 20% tax, raise that to less than a swallow.

Even at 20% the tax is much too small. Recently, the EU reduced its support price for sugar by 36%. The tax would not even restore the cost to previous levels.

The tax is too small for another reason – it would be swamped by price promotions. Currently, in a recession, 40% of all food and drink is purchased on some kind of discount. With soft drinks, “buy-one-get-one-free” and “better than half price” promotions are commonplace. With marketing discounts of 50-60%, a 20% tax would be easily concealed or absorbed.

The authors also do not consider the politics of policy. In the US, in 2010, consumers voted down soft drinks taxes all over the country. In the UK, no political party has ever seriously considered any “health related food tax”. And after the recent debacle over the non-health, but food-related “pastie tax”, none is likely to do so.

The companion proposal, of using revenues from “bad” food taxes to subsidise “good” foods, is wishful thinking. The Treasuries in both the UK and the US have always opposed “hypothecated” or “earmarked” taxes. Now, when “deficit-reduction” is the principal goal, ring-fencing any new revenues for health is improbable.

If price instruments are important, but visible taxes are politically unacceptable as well as technically ineffective, what can be done?

Strategically, the goal is to create a price differential between healthier and less healthy foods. Raise the cost of the bad, lower the cost of the good, or both. Make the healthy choice the cheaper choice. Create economic incentives for health. Options include:

Agricultural policy: raise the support prices, for limited production quotas, of milk fat, meat fat and sugar. Increasing prices would attract political support farm interests. They would raise the cost of less healthy ingredients to food manufacturers, applying pressure to reformulate products. And they would be invisible to consumers.

Government catering: the government is Britain’s largest caterer, through schools, hospitals, offices, residential institutions, military messes. It has the purchasing power of a supermarket group. Incorporating nutritional standards into supply contracts would reward progressive companies producing healthier ingredients. Then, adjusting the already subsidised prices in canteens would give consumers incentives for healthier choices. Save money by eating right.

Corporate margins: healthier products often carry higher prices, not because they cost more to produce, but because manufacturers and retailers add on extra margin. They know that many nutritionally aware consumers are affluent, willing to pay more for products they think will do them good. So companies charge a “health premium”. Name-and-shame surveys, at local as well as national level, would expose companies perpetrating this form of nutritional extortion.

Soft drinks are a classic example. Sugarless carbonates and squashes cost significantly less to produce than sugared variants. They should cost consumers less too. Cut the price of sugarfree.

if advocates are determined to tax something, they should reconsider the world’s oldest food tax -- on salt. The prospects are better than for any other nutrient. No big corporate interests defend salt. It is very cheap, so taxes could be very high, higher even than the 348% currently on tobacco. The effect would be to cut manufacturers bulk purchases, not raise retail prices. This would strengthen the already successful programme to reduce the salt added to a wide range of popular foods.

That, in turn, would bring a second benefit, reducing strokes. Strokes are the most expensive disease, with high direct health care costs and large social aftercare costs. A salt tax would reduce expenditure substantially. It should be supported by any economically rational health minister.

In sum, price instruments are likely to become an increasingly important part of nutrition policy. But taxes on “bad” foods are only one of many options.

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(1) Shu Wen Ng, Cliona Ni Mhurchu, Susan A Jebb and Barry M Popkin (2011), Patterns and trends of beverage consumption among children and adults in Great Britain, 1986–2009. British Journal of Nutrition. DOI:

(2) J T Winkler (2011), Why soft drink taxes will not work. British Journal of Nutrition. DOI:

Prof J T Winkler
Nutrition Policy Unit (Retired)
London Metropolitan University

via delle Mantellate 1a
Florence 50129
(0039) 340 726 6234

Competing interests: No competing interests

21 May 2012
Jack T Winkler
Professor of Nutrition Policy
London Metropolitan University (Retired)
28 St Paul Street, London N1 7AB