Laurie Kubiak: NZIER's review of studies of sugary drinks tax finds no benefits

New Zealand will need effective and efficient policy responses to make progress tackling obesity. Photo / 123RF

Opinion

Professor Boyd Swinburn's article last Monday, "Doubters try to bury sugary-drinks tax", comments on our report on sugar taxes. I would like to refute Professor Swinburn's suggestions that our work was politically motivated and that we were selective in our review of the literature.

The New Zealand Institute of Economic Research has a 60-year reputation for providing independent and robust advice. Our consulting revenue comes from Government, NGOs, industry organisations and firms. Whoever the client is, our advice is always based on a thorough and impartial assessment of the evidence on both costs and benefits. We tell clients what they need to hear, not what they want to hear.

Obesity is an important issue, with serious consequences. New Zealand needs policy responses that are both effective and efficient. The problem is complex, so different perspectives are valuable and Professor Swinburn and his colleagues play an important role in this discussion.

Our study looked at the most recent evidence on sugar taxes around the world. We were unable to find evidence that any sugar tax actually implemented anywhere in the world has led to improvements in health.

Our commission had two parts: to present a framework for thinking about sugar taxes, based on modern tax policy ideas, and to scan the recent literature for evidence a sugar tax decreases disease and death.

The framework looks at why a tax on sugar taxes might be effective, by asking "by what process would a tax on fizzy drinks lead to improvements in health?" This is not a simple matter when it comes to sugar in drinks (as opposed, say, to tobacco), because there are many high-sugar substitutes to fizzy drinks that are not taxed in most countries. If a tax on drinks simply induces a switch to chocolate, for example, then health outcomes might remain unchanged.

We think that to be effective at improving health, a sugar tax must work across five steps: it must increase price, the increase in price must cause consumption to fall, reducing consumption must lead to a lower sugar and/or energy intake, the lower energy intake must result in lower physiological risk factors and lower physiological risk factors must improve health outcomes.

We assessed 47 separate studies published in English-language peer-reviewed journals in the last five years. Many of the studies reviewed were themselves comprehensive reviews of earlier work. We are confident we have surveyed the relevant literature broadly.

Our conclusions reflect the evidence on observed behaviour and outcomes in countries that have actually implemented a sugar tax, rather than studies that assumed a response.

Many of the studies are so poorly designed or based on such different markets that they tell us nothing or nothing relevant for New Zealand. This is an important finding in itself, and is why we say "the evidence that sugar taxes improve health is weak", rather than a more definitive statement that "a tax will not improve health".

That said, this issue is much studied and there are some high-quality studies that find no link from taxes to better health.

We found that the evidence for effectiveness became weaker the more steps in the logic were included in the study. It is possible a sugar tax may lead to some reduced consumption of the taxed product in some contexts. However, we found no studies based on actual experience with sugar taxes that identified any resulting impact on obesity, diabetes or other health outcomes.

• Laurie Kubiak is chief executive of the New Zealand Institute of Economic Research.