Sweet nothing: fat and sugar taxes don’t reduce obesity

Aaron Wudrick
Canadian Taxpyers Federation

In the midst of continued debate in Canada about the imposition of fat and sugar taxes, the Canadian Taxpayers Federation (CTF) today released a new study, Sweet Nothing: Real-World Evidence of Food and Drink Taxes and their Effect on Obesity which analyses the track record of food and drink taxes around the world.
“While theoretically appealing to many public health activists, food and drink taxes simply don’t work as advertised,” said journalist and study author Peter Shawn Taylor. “Evidence from the real world shows taxes on fat or sugar don’t reduce obesity and don’t make people healthier – they do, however, disproportionately harm the poor, fill government coffers and cause substantial unintended negative consequences.”
Among the study’s key findings:
In Mexico, a 2014 fat tax caused a temporary decline in soda consumption. However, sales are now rising again, and there’s been no reduction in national obesity rates.
In Philadelphia, a new soda tax in 2017 reduced grocery sales within the city, and led to a spike in sales outside city limits, hurting downtown grocers and benefiting their suburban peers.
Despite a decline in soda consumption in Canada between 2004 and 2015, obesity rates continue to rise. This suggests there is no causal link between soda and obesity.
Polls showed 90 per cent of Cook County (Chicago) residents opposed a new soda tax imposed earlier this year, leading to its prompt repeal.
A fat tax in Denmark in 2011 led to an increase in cross-border grocery shopping to Germany to avoid the tax, and caused substantial Danish job losses.
“Public health is an important concern, but the experience of numerous jurisdictions shows fat and sugar taxes aren’t achieving what their proponents claimed they would,” said CTF Federal Director Aaron Wudrick. “Governments may enjoy the additional revenue they generate, but if a tax designed to reduce obesity doesn’t reduce obesity, it’s hard to see how it’s anything but a shameless tax grab.”

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