Four reasons a sugar tax ‘won’t work’: FDF boss

The nature of food and drink manufacturing would make its implementation “almost impossible”​, he told a seminar at the event Food Matters Live yesterday (November 17). “You would have to have food inspectors go to the factory gates of just about every food manufacturing plant in Britain that produces sugar-based products and assess the amount of sugar​ [in their products].”

But the government’s imminent public spending review is going to mean that there “aren’t any trading standards officers left” ​to carry out the inspections. “So, unless the government is going to ​invest separately [in inspectors], that won’t work.”​

The FDF boss’s other three objections against a sugar levy were: the government’s promise earlier this year of no new taxes, the claim that it would not raise enough money and the uncertainty of any price rise being passed on to shoppers.

Implementing a sugar tax would mean the government was reneging on its pre-election promise, Wright claimed. “The government stood for election only six months ago and promised no new taxes. This would be a new tax and so would be a great contravention of their agreements.”​

‘There’s no guarantee’​

But the most important argument against a tax was the uncertainty that it would be passed on to consumers, said Wright based on his 15 years of experience of working in the alcoholic drinks industry with Diageo. “There is no guarantee it will make any difference to the price,” ​he said.

“We​ [at Diageo] used to get excise duty increases just about every year. We and the retailers decided whether or not to pass them on to the consumer, depending on the quality of the economic cycle.”​

At some points – when the economic cycle  was at a low point – excise duty rates would not be passed on to consumers. “The retailer and the manufacturer would take the margin squish and bear the cost and the consumer would find no difference in the price.”​

But at other times following a duty increase, the price would be increased by “more than the rate of the excise duty and no one would notice”, ​he told the audience.

‘How will it have an effect’​

“So there’s no guarantee it​ [a sugar tax] will be passed on. So how will it have an effect?”​ Wright said.

Acknowledging Britain’s obesity crisis, Wright said the nation needed a “massively complicated, multi-layered solution” ​​to solve the problem.

Chief executive of the British Hospitality Association Ufi Ubrahim saw some merit in a sugar tax – “sticks are effective perhaps”​ – but worried about its impact on the poor.

“There’s a direct correlation between the levels of disposable income and the levels of obesity in children,”​ Ubrahim told the seminar.

“We are fearful that taxes as an approach will be targeting the most vulnerable in society. So it is questionable whether that is the genuinely right approach.”​

Ubrahim said the solution to obesity lay in government leading a campaign to educate children and their parents about the importance of healthy eating.

Both speakers were taking part in the seminar Prioritising public health: improving the nutritional state of the nation. Food Matters Live is taking place between Tuesday November 17 and Thursday November 19 at the Excel centre in East London.