Sweet move in obesity policy
Drinks that are high in sugar are to be taxed as part of the government’s strategy to tackle obesity. The tax will come into effect in April 2018; drinks with more than 5g of sugar per 100ml will face a levy, while a higher tax will be placed on those with more than 8g.
In an online article, the government’s Behavioural Insights Team, or ‘nudge unit’, wrote about the potential impacts of a sugar tax on consumer behaviour. Hugo Harper, Luke Ravenscroft and Owain Service pointed out that while the team is usually more concerned with implementing simple, non-regulatory solutions to society’s problems, taxes can play a role in behavioural change. The authors wrote that the levy will have a greater impact if the additional cost of sugary drinks is passed on to consumers, especially where there is a diet / zero-sugar alternative available. They added: ‘It will also have a bigger impact if producers and retailers shift their marketing budgets to products lower in sugar, where they will in future likely enjoy higher margins.’
The authors added: ‘Research has shown that consumers underreact to taxes that are not salient. In one study by Raj Chetty in the US, posting tax-inclusive prices reduced demand by 8 per cent, even though the same price was paid whether the tax was highlighted or not. In other words, if cans of cola are clearly marked as being higher in price because of the levy, this may lead to a greater effect on behaviour.’
The authors also point to evidence that the effect of taxes on consumption may be disproportionately larger above a certain threshold. They modelled these effects and found that a 12 per cent price increase leads to a steeper reduction in calories consumed – this relies on the assumption that the price increase is passed on to consumers.
The full government ‘obesity strategy’ is set to be released in the summer, and we asked Professor in Health Psychology Jane Ogden (University of Surrey, pictured), who has worked extensively in the field of obesity, to share her thoughts on the new tax and potential approaches the government could take. She said over the last 30 years individuals had been the focus of obesity prevention and treatment with an emphasis on how individuals think and behave in order to change their diet and exercise habits. Slowly, policymakers and psychologists are beginning to realise that these problems occur on a societal level: ‘It’s becoming increasingly obvious that people can’t make healthy choices in a world that encourages them to behave in an unhealthy way. At last experts are beginning to recognise you need to change the environment in which we live including the food industry, ranging from catering to food production and marketing and urban planning,’ Professor Ogden said.
Ogden added that the food industry, major employers, schools and universities would be good places to start in combatting rising levels of obesity. But from a psychological perspective she said it would still be useful to focus on individuals: ‘The emphasis has to be on structural, social and environmental change but as psychologists we still have a role to play as all those in charge of those industries and organisations are still individuals who have their own beliefs and behaviours which impact upon the environment of others. Therefore an interesting way forward for psychologists would be to use our psychological skills to change the beliefs and behaviours of the people in charge of our environment as a means to encourage others to make healthier choices.’
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