Despite South Africa’s Sugar Tax Success, Food Industry Impedes Similar Taxes in Neighbouring Countries
An advertisement in favour of a tax on sugary drinks run in South Africa as part of a campaign by advocacy group Health Living Alliance (HEALA)

CAPE TOWN – South Africans are consuming fewer sugary drinks since their government introduced a tax on these in 2018 – but powerful multinational food and beverage companies are inhibiting neighbouring countries from following suit, according to research published on Tuesday.

South Africa was the first African country to impose a tax of approximately 10% on the sugar in sweetened soft drinks in an attempt to curb rising obesity and related diseases including diabetes and hypertension.

Last week, the Lancet published a four-year study that looked at the sugar consumption of 113,000 South African households and found per capita daily sugar consumption dropped from 16.25g before the tax was announced to 10.63g in the year after the tax was implemented.

But research published on Tuesday by the Global Health Action on seven other countries in southern and east Africa found that the path to introducing a similar tax is being blocked by industries.

There was little information in the seven countries about citizens’ consumption of sugary drinks, taxes or the industry itself, yet sub-Saharan Africa has been identified as a “growth market” for soft drinks, according to the research.

Sugary Drinks are ‘Vectors of Disease’

Professor Karen Hofman

“Obesity and its related diseases are escalating like a tidal wave across the continent of Africa,” said Professor Karen Hofman, director of Wits University’s Centre for Health Economics and Decision Science (known as Priceless). 

“It is fueled by colonisers in the guise of the processed food and beverage industry, and their associates in the advertising and marketing industries, who see our continent as a final growth market and who, for many decades have ensured that even our children are brainwashed to buy the products, because it will make them feel cool,” Hofman told the virtual launch of the research

She described ultra processed food and beverages as “vectors of disease” available at local supermarkets and transmitting “diabetes, cancer, and high blood pressure”.

Although a number of the seven countries – Botswana, Namibia, Zambia, Uganda, Kenya, Rwanda and Tanzania – do tax soft drinks, none target the sugar content or do so for health reasons.

Uganda has a general excise tax on soft drinks but despite NCDs now accounting for one-third of the country’s deaths, there is “limited recognition” of the link between sugary drinks and NCDs, according to the Uganda research.

“The soft drink industry has been influential in framing the taxation debate, and the Ministry of Finance previously reduced taxation of sugar-sweetened beverages,” according to the report.

Tension Between Economic and Health Considerations

In 2018, the Ugandan Finance Ministry proposed to cut the tax on non-alcoholic drinks from 13% to 10% – apparently because investment from Coca-Cola was contingent on this. After objections from the health ministry, the tax was reduced by to 12%, but the agreed plan of action is to gradually reduce the tax to 10%. 

After the tax was cut, Coca-Cola Uganda’s CEO is quoted as saying: “This $15 million investment was made on a promise of reducing taxes (on soft drinks), from 13% excise duty to 12% in the 2018/19 financial year, and we are glad it was implemented. This is confirmation that a favorable tax regime can attract more investment for the industry.”

While taxing sugary drinks in Kenya “has been identified as an effective mechanism to address nutrition-related non-communicable diseases”, the country is not yet committed to this.

“Government has competing roles: advocating for industrial growth, such as sugar and food processing industries to foster economic development, yet wanting to control nutrition-related non-communicable diseases,” according to the report.

An unnamed representative from the Kenyan Ministry of Health told researchers that “the Kenya Association of Manufacturers come out guns blazing whenever any of the clients is subjected to scrutiny in terms of ‘we need to tax ‘or ‘what is the health of this product’.” 

Another health official conceded that “unfortunately there’s a lot of industry interference with policy” on taxing sugary drinks, and that  it was not simply a decision about health but  [“an industrialisation issue and also a manufacturing practice issue … an industry like that, of course, has a lot of policy interference because they have big money they can compete with us.” 

Proliferation of Unhealthy Food

Botswana and Zambia appear better prepared and more interested in taxing sugary drinks, according to research presented at the launch.

However, said Zambian researcher Mulenga Mukanu, “The priority of most African governments is towards economic growth, as evidenced by policies that encourage the growth of industries that produce unhealthy commodities like sugar-sweetened beverages. This context should not be ignored.”  

Researcher Safura Abdool Karim said the growing problem of NCDs in sub-Saharan Africa “is partly due to the nutrition transition and proliferation of unhealthy foods across the continent, coupled with a lack of regulation and a lack of enforcement of existing policies”. 

But Abdool Karim concluded: “There are a number of cost-effective population-level interventions that can be implemented, particularly in low and middle-income countries, including regulating food labels, regulating marketing to children, and adopting taxes on sugary beverages.”

South Africa succeeded in introducing a tax, she added, because it based its campaign on robust local evidence, key policy-makers had political will, there was support from civil society advocacy organisations and “industry interference was neutralised”.

 

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