The Great Sugar-Tax Debate

Obesity is a complex, multifaceted metabolic disease with many environmental, genetic, social and economic factors,1 but one direct contributor is high intake of Sugar-Sweetened-Beverages or ‘SSB’.2-4 Would implementing a tax on these drinks actually reduce consumption and lower obesity rates or would this tax be just another revenue-raising scheme by a government who is arguably becoming more patronising and increasingly involved in our personal lives? This divisive debate has been reignited in Australia after the UK recently approved such a tax.

What’s not in dispute is that overweight and obesity rates have reached critical levels in Australia, and that these are major risk factors for the development of diabetes, cardiovascular diseases and some cancers.1, 5-9 The total annual economic cost of overweight and obesity in Australia is estimated at $41billion in 2008, and it now affects 63% of adults and 25% of children.10, 11 Many argue that if the public purse pays for a significant proportion of the consequences of diet-related disease, than those in charge of public health need to accept more responsibility and be more proactive in changing the Australian dietary landscape.

The debate of personal choice vs public interest is hotly contested.

For the purposes of the following discussion, soda-popsugar-sweetened-beverages or SSB’s include soft, energy, sports or vitamin drinks, iced-teas or other water-based drinks which contain sugar or other energy-containing sweeteners (collectively termed ‘sugar’), but exclude 100% fruit juices or flavoured milks.4, 12 The calories in these drinks have little satiating effect and contain few if any nutrients and this is not compensated for by reducing calories from solid food or non-SSBs, increasing the likelihood of these consumers becoming overweight and obese.4, 13, 14

Life Nutrition has undertaken in-depth research on this topic and for this article and from the best evidence available, we believe that there is a very strong, consistent case made that increasing the end-price of SSB’s by an average of 20% would decrease daily energy intake, especially for key at-risk subgroups like the young and disadvantaged. Doing so could encourage manufacturers to reformulate drinks, healthier options should become cheaper and population obesity rates should drop, corresponding to significant health expenditure savings. Furthermore, revenue raised from this tax could  be directed into other obesity-prevention programs.

Why do we need to limit SSB’s and will a tax actually work?

The sugary nature of these drinks triggers dopamine reactions in the brain, similar to other substance addictions and encourages further consumption.15, 16 Therefore, it is perhaps unsurprising that young males in particular over-consume SSBs with 51% of 14-18year olds and 44% of 19-30year olds consuming them the day prior the latest Australian Health Survey interviews.17 Those from low socio-economic groups, indigenous communities and children are also very high consumers.18, 19 Aside from the relationship between weight gain and SSBs, there are also strong associations with poor mental health, diabetes mellitus, dental caries and asthma.20-23

SSB’s provide no nutritional benefits, can be harmful red bullwhen consumed in excess and certainly contribute to weight-gain and subsequent metabolic disease.3, 16, 22-25 Therefore, Life Nutrition believes that they are not only unnecessary, but potentially damaging dietary items and can reasonably be compared to tobacco or alcohol, where taxation initiatives helped to discourage consumption.26, 27

The success of taxation in discouraging purchases of a consumable product is largely dependent on its ‘Price Elasticity’, or the responsiveness of purchasing behaviour to price change.12, 28, 29  To explain this in simple terms – when there are no alternatives or the product is a basic necessity, the price is considered to be inelastic and price increases will not greatly change purchasing behaviour. However, SSB’s have been shown to be quite elastic with a research finding that an increase in price of 10% will reduce consumption by about 8-13%.12, 28 This effect is comparable or even higher than that of tobacco, indicating that as per the decline in cigarette use, this taxation strategy is likely to be very effective in reducing SSB consumption.27, 30

After reviewing this evidence and the likelihood of beneficial outcomes, Life Nutrition advocates for this ‘top-down’ public health approach as small-scale interventions and education programs have been largely ineffective, with fewer than 7% of the population heeding the current Australian Dietary Guidelines.17 Notably, despite these advising that the consumption of SSBs should be ‘limited’, around 2% of an average adult’s daily energy intake currently comes from soft drink and flavoured mineral waters alone.17, 31, 32 However, we believe that this tax should be implemented as just one aspect of a multi-directional approach to combatting the many causes of obesity, other valuable approaches including; continued education, changes to the built environment and addressing food insecurity for some vulnerable subgroups.33

Unfortunately, as there is little evaluation available yet from SSB taxes applied recently to free-living populations in France, Hungary and Mexico, the support for this initiative still largely comes from extensive modelling and cohort studies. However, indications from the Mexican tax introduced in 2014 is that consumption has fallen by 12%.34 Evidence from significant South African, UK, American, Indian and Irish models concur that being elastic, as the SSB end-price rises, energy intake and weight will increasingly lower.12, 35-37

Though limitations include little Australian-specific analysis, varying target groups, different tax strategies and model inputs/outputs, these models generally agree that with an end-price increase of 20%, the prevalence of obesity such populations should fall by 3.8% in men and 2.4% in women.36, 38 Extrapolating these findings to our population, 78,014 Australian men and 47,655 Australian women would no longer being categorised as obese and this would have far-reaching health and economic benefits.11

So why hasn’t this yet been done?

Essentially, there hasn’t been enough vocal push or demand from the public for the tax and the large multi-nationals behind many of these SSB’s yield too much power in political spheres. However, there are many valid concerns with the application of a tax to SSB’s, many which you may personally hold or have heard in discussions concerning this tax – some of these are noted and debated below:

  1. SSB taxes are regressive taxes – Those who can least afford it will be disproportionately and negatively affected.12, 39
    • SSBs are non-essential dietary items – as low-income earners are more sensitive to price rises on elastic consumables, the likely response is decreased purchases.28, 29 Often being high-consumers, this will particularly benefit their health, reducing private expenditure on diet-related disease.12, 40
    • Public health programs that maybe funded with the revenue collected from this tax are generally most beneficial those most disadvantaged.41 Such revenue could be used to subsidise healthier alternatives – as consumers will purchase these if they are less expensive than unhealthy choices. 42, 43 or to establish education and school-based programs including kitchen gardens.44, 45 They could also be used to improve the built environment, including accessibility to healthy foods, water-fountains, reducing social inequity and increasing physical activity opportunities.46


  1. Consuming SSB is a personal choice and the government should not interfere with an individual’s behaviour or with the ‘free market’.
    • Life Nutrition believes that one of the government’s roles is to maximise public health and obesity is increasingly a top-ranking health, social and economic issue that requires more action.10, 11 As tax-payer funded health expenditure is rising and diverting funds from other sectors, we believe that this outweighs the commercial interests of a few and over-rides our individual ‘right’ to over-consume non-essential, potentially damaging dietary liquids.
    • Many government initiatives already control or change personal and commercial behaviours in the interests of public health including; tobacco and alcohol restrictions, mandating vaccinations and the wearing of seatbelts.26, 30, 47 Some may argue, that as Australian governmental policies have contributed to the current obesogenic environment, it is up to them to develop new policies and strategies to reverse this.48sugar
    • ‘Personal choice’ implies informed and free choice. However, due to age, education or literacy issues, many SSB consumers are unaware of the sugar content and/or understand the implications for health. ‘Free choice’ has also been manipulated and compromised by aggressive marketing techniques.49-51


  1. This tax is unfair to moderate consumers and as SSBs are not the sole cause of obesity.
    • The SSB tax will have negligible effect on moderate consumers and is far outweighed by the large beneficial impacts expected for the high-consumers.
    • True, Life Nutrition acknowledges that obesity is a multi-faceted disease and not caused by SSBs alone,48 but we believe that it’s a good starting point for real action as reducing a non-essential beverage which is contributing 2% of energy to the average Australian adult diet, will certainly help with weight management and population obesity rates.17
    • Revenue from this tax could help fund a multi-strategy and multi-level approach to obesity prevention and help with associated obesity-related health costs, reducing the burden for all taxpayers – including those moderate SSB consumers.12, 52

So – thank you for reading this article and we hope that we have provoked thought and imparted knowledge which you may not have held prior. Please let us know your thoughts as we’d love to hear what you think.

Do you agree with our analysis and conclusions and support a tax (if so, please share this article!) or do you resent the idea of further governmental control?

If you don’t think a tax is a good solution, on what actions or projects do you think the government should focus their efforts to address Australian overweight and obesity rates?

soft drink cans





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