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Michael Jacobson

Leading US health activist has his say on SA’s proposed sugar tax

He writes in Business Day:

SA is poised to be a bellwether in the global fight against non-communicable diseases such as diabetes, heart disease, and obesity.

Will Big Soda successfully make up for declining consumption of sugar drinks in North America and Europe by exploiting the South African market and other countries in Africa?

Or will the government and community leaders be able to put in place a sugar-drink tax to provide needed revenues for vital health programmes and reduce consumption?

The South African government has proposed a sugar-drink tax aimed at reducing obesity by reducing excessive sugar consumption. Smartly, it provides an incentive to industry to reformulate products by basing the tax on the sugar content of beverages. The more sugar, the higher the tax.

Unfortunately, the soft-drink industry’s response has been all-out opposition, and two trends explain why. In the US, from 1998 to 2015, consumption of carbonated sugar drinks declined 27%. In SA, the consumption of soft drinks more than doubled from 1998 to 2012, With per-capita consumption about half that of the US, there is plenty of room to grow.

Clearly, the industry is turning to countries such as SA to replace the declining sales in the US and Europe.

The Atlanta-based soda giant has said it will invest $17bn from 2010 to 2020 to expand its African footprint, and Coca-Cola SA’s growth strategy is explicit about targeting the poor to grow its market share.

That should be of special concern to SA.

“We have young generations who can consume any kind of food and beverage; [they’re] not caring about their health yet,” Ahmed Nazmy, head of marketing for Coke’s Egyptian franchise, told Advertising Age.

SA is Coca-Cola’s largest market in Africa, and one of its best performing in the world. The country is a case study in Coke’s achievement to be “within an arm’s reach of desire”.

On a trip to SA, I was troubled to see how the Coca-Cola logo was everywhere. The drinks too are everywhere, whether a person is shopping in a chic mall in Johannesburg or trekking down dusty roads in the rural countryside, as Ron Irwin wrote in an article entitled Painting South Africa Red on

Having used the tobacco playbook to exploit emerging markets such as SA, Coca-Cola and the rest of the sugar-drink industry are now using the tobacco playbook to fight the government’s attempt to protect public health by misrepresenting the science and trotting out bogus reports.

For instance, the industry claims that a soda tax will cost SA 60,000 jobs. This is the claim it has made repeatedly throughout the globe.

In its effort to block a soda tax in Philadelphia, the industry said it would cost that city 2,000 jobs. However, a professor at the Wharton School of Business called the claim “off the bounds of realistic”, noting that it assumed the entire industry would collapse. Nor has the soda tax enacted in 2014 in Mexico cost that country jobs.

The National Institute for Public Health in Mexico concluded in an analysis of employment in the manufacturing and commercial sectors since the tax took effect: “The analyses described in this note show that there were no reductions in the number of employees neither in the [soft-drink] or energy-dense-food manufacturing industry nor in the commercial establishments in Mexico after the taxes were implemented. Moreover, unemployment rates in the country did not increase after the implementation of the taxes.”

The job-loss claim is not true in SA either as the Trade and Industrial Policy Strategies rebuttal made clear, calling the industry’s job loss estimates “patently exaggerated”.

The soda industry’s phony jobs-loss arguments against soda taxes should not be a surprise, given its unwillingness to accept the science about the role of sugar drinks in increasing the risks for such diseases as obesity, heart disease, diabetes and dental caries. SA should reject the soda industry’s pages from the tobacco playbook, both its exploitative marketing and its opposition to well-founded public health policies.


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