Government report paves way for UK’s potential global first snacks tax
A UK-government linked National Food Strategy (NFS) report could see the creation of a global first ‘snacks tax’ imposed on manufacturers, increasing the cost of key chocolate and wider confectionery brands, reports Neill Barston.
According to the latest independent review, which comes amid a major obesity crisis in which figures have revealed two thirds of adults are overweight, as well as a third of children, according to NHS data – with consumption of product ranges traditionally higher in sugar and salt being held as key factors.
Consequently, a total of 64,000 deaths a year in the UK are linked to poor diets and obesity – prompting the latest review, instructed by Prime Minister Boris Johnson, who acknowledged his own issues with weight had impacted on the severity of his hospitalisation from Covid-19 last year.
However, he has since responded to the report, stating that while he noted its merits, he was ‘not attracted’ to taxing the public on the issue – despite the drinks sector having successfully done so within the past couple of years.
A central recommendation of the latest NFS report (the second part of which was released last week), calls for the introduction of a £3/kg tax on sugar and a £6/kg tax on salt sold for use in processed foods or in restaurants and catering businesses. It argues that this would directly encourage manufacturers to place less salt and sugar in product ranges, and put it in line with the sugar tax imposed on drinks companies, that has been acknowledged as having a positive impact on product reformulation – bringing about a 29% cut in sugar content within soft drinks categories.
According to national reports, this would add around 9p to the cost of a Mars Bar, a further 1p to crisp multipacks, as well as adding notable rises to manufacturers of popular cake ranges.
The study called for legislation to be brought forward in the 2024 Finance Bill, and allowing a further three years for businesses in the sector to adapt to requirements – which drew a mixed response from industry organisations and health campaigners.
Furthermore NFS report highlighted the fact that manufacturers of high fat salt and sugar products (HFSS) ranges enjoy strong profits as there is continual momentum on keeping prices down due to the relatively high fixed costs of ingredients – making innovation in reformulating products more challenging.
The past few years have seen attempts from major manufacturers to bring in alternative options, including Cadbury’s Dairy Milk 30% reduced sugar, and Nestle’s Wowsome bars, though there have been few other prominent examples within mainstream confectionery shelves.
As the report highlights – retail price pressures have meant that snacks and other foods fitting within these categories remain particularly attractive to manufacturers, with little incentive to make healthier options available. Within the confectionery sector, the government-backed campaign from Public Health England to voluntarily encourage manufacturers to reduce sugar by 20%, failed to do so over the past five years had failed to do so.
Responding to the publication of the second part of the National Food Strategy, the Food and Drink Federation’s Chief Scientific Officer, Kate Halliwell, offered a cautious welcome, though did not believe taxes were the way forward to delivering on reformulation goals.
She said: “This report will help inform the wider conversation around the future of the UK’s food and drink industry. Food and drink manufacturers welcome the intent to bring forward measures which will help to increase access and affordability of food and drink for children and families on lower incomes.
“In contrast to this, a salt and sugar tax will ultimately impact those families who are already struggling to make ends meet, by making food and drink more expensive. After many years of cost pressures, businesses in our sector are already operating on very tight margins, and any further costs would simply have to be passed on to the consumer in the form of higher food prices.
“These taxes will not drive reformulation. Food and drink manufacturers have been voluntarily lowering fat, salt and sugars in recipes for decades as well as reducing portion size, but it takes time to change much-loved products. Furthermore, the Government’s proposed advertising ban and promotions restrictions would limit the ways in which companies can let families know about exciting new options.
“It is hard to view the proposals that the taxes raised will pay for additional health plans, with anything but scepticism. The same promise was made ahead of the introduction of the soft drinks industry levy, but was quietly dropped shortly afterwards,” she explained, adding that the FDF would be contributing its own ideas to Defra, including via the Food and Drink Sector Council report due in September.
In contrast to the FDF’s position, Graham MacGregor, Professor of Cardiovascular Medicine at Queen Mary University of London and Chairman of Action on Salt, believed that a national food strategy was vital, including the introduction of taxation to drive change.
“If ever there was an opportunity to finally transform our food system to save lives – this is it – especially the call for a landmark Salt Reformulation Tax which will make the UK the first country in the world to have a mandatory salt levy.
“Not only will the tax incentivise further innovation and reformulation, such as the use of potassium chloride – which is less harmful to health than conventional salt, it will build a better food system for a healthier nation. Previous attempts by the government to encourage voluntary reformulation have failed which is why more fiscal measures are urgently needed to address the country’s shocking health inequalities. The question is, are food manufacturers willing to make their food healthier by reformulating?”
In addition, Dr Kawther Hashem, Campaign Lead at Action on Sugar says agreed that as with the drinks taxation introduced in recent years, addressing salt and sugar levels directly with manufacturers offered a transformational moment for the industry.
“Without doubt, a landmark Sugar Reformulation Tax would fix the current issues seen with the voluntary sugar reduction programme. The last progress report showed how far we are from meeting the 20% reduction with only a minuscule 3% reduction.
“This can be compared with the Soft Drinks Industry Levy which has seen a whopping 35% reduction in sugar within just four years. This demonstrates the power of government to help save the NHS by reducing the risk of obesity and type 2 diabetes. Never has this sugar tax been so vital.”
Moreover, global charitable organisation Fairtrade has also leant its support to the food strategy led by businessman Henry Dimbleby.
Dr Louisa Cox, Director of Impact at the Fairtrade Foundation, welcomed its arrival both in environmental terms and assisting supporting those within supply chains.
She said: “The report comes at a critical time: farmers and workers who produce our food are already feeling the effects of the climate crisis. Urgent action is needed to reduce our carbon emissions. With food production contributing to 30% of greenhouse gas emissions, it is vital that we move towards greener, more sustainable agricultural supply chains to protect producers overseas, as well as our own food security here in the UK.
‘We welcome the focus in the report on the role that trade policy can play in supporting a reduction in carbon emissions and a sustainable food system. We support the recommendation for a core set of standards to define our trade policy. We are keen to see standards which encourage ‘trade for development’ objectives and the investment in small holder farmers who produce our food, so that they are not only able to adapt and mitigate against the impacts of climate change, but are better able to earn decent livelihoods that provide for themselves and their community.”