Sugar Sweetened Beverages Taxation

Price is a key factor in the purchasing process, which encourages the sugar-sweetened beverages’ industry to use strategies to ensure product accessibility and buying, such as:

• pricing policy by beverage category;
• ubiquitous discount;
• bulk purchasing encouraged;
• discount associations with fast food.

In this regard, the Weight Coalition has produced a report on the underlying marketing of sugary drinks, dedicated to the price. To consult it, click here.

De plus en plus de juridictions à travers le monde ont instauré une taxe sur les boissons sucrées.

A sugary drinks’ tax is a fiscal measure that would generate new revenues while attributing the co-responsibility of the burden of obesity to the sugar-sweetened beverages industry. This is a concrete and dual-paying measure for Quebecers, since, in addition to reducing the impact of a major contributor to obesity, it allows investment to stem this problem. The measure would serve to absorb a portion of health costs caused by over-consumption of sugary drinks in Quebec.

A healthy population is a source of dynamism and wealth that the province can not do without in the coming decades. Therefore, a sugary drinks’ tax dedicated to prevention is one of the measures to implement, because it:

• aims to improve the living and health conditions of Quebecers;
• Is based on a tax measure successfully implemented by other legislations;
• demonstrates creativity in the face of the urgent need to act to prevent obesity and chronic diseases, in order to:
• reduce the pressure exerted by the health system on our public funds;
• limit the social and human costs associated with disability and declining productivity;
• reverse the forecasts that the current generation would be the first whose life expectancy is less healthy than the previous one, because of its lifestyle.

The inclusion of other sugary drinks (iced teas, vitaminized waters, sports drinks, energy drinks, etc.) would generate even greater revenue.

• A tax of one cent per liter soft drink would generate estimated annual revenue of 8,6 million dollars.
• For a 5 cents per liter tax, revenue is estimated at more than 40 million dollars.
• For a 10 cents per liter tax, revenue could reach more than 80 million dollars.

For more information, see the Weight Coalition paper, Une taxe sur les boissons sucrées dédiée à la prévention : pour des finances publiques saines, filed as part of the 2017-2018 pre-budget consultations.

Moreover, thereport of the Commissioner on Sustainable Development (in French) acknowledged the seriousness of the weight problem, as well as the urgent need to do more to promote healthy eating, suggesting in particular that a sugar-sweetened beverages tax should be introduced. Thus, such a measure would constitute a lever allowing the government to implement preventive actions to match its ambitions.

In addition, in the report of the Commission d’examen sur la fiscalité québécoise (in French), taxation of sugary drinks is also identified as a road map for action. The members of the Commission retained the idea that “the amopunts of money released should be reinvested in the fight against obesity in order to have a real effect”.

The Quebec Evaluation on Obesity Prevention, from the Quebec Heart and Lung Institute Research Centre – Laval University, also published the book “Taxing Soda For Public Health: a Canadian Perspective”, in which is conducted a comprehensive analysis of the merits, potential impacts and applicability of sugar-sweetened beverages’ taxation policy as a public health measure to prevent obesity and diabetes, particularly in Canada. The key messages from this analysis are available in the book summary.

Consequentley, taxation of products harmful to health, including sugar-sweetened beverages, is increasingly being discussed in several jurisdictions around the world, especially to:

• generate revenue that can be invested in prevention and health promotion;
• offset health costs associated with the consumption of these beverages, as well as high marketing industry investments;
• denormalize regular consumption of theses products;
• reduce the consumption of these beverages by introducing a significant tax.

The tax on tobacco products is the basis for this proposal and, in this case, the financial deterrent for promoting healthy behaviors has been proven.

• People who consume the largest quantities of sugary drinks are more sensitive to price increases and more likely to reduce their consumption.^1,2
• When the price of sugary drinks increases, demand tends to decrease. A 10% increase in the price would result in a decrease in consumption of 8 to 12.6%.³
• A sugar-sweetened beverages tax, coupled with an information campaign that explains the positive effects associated with reduced consumption, has better effects on reducing consumption.⁴

  Using reports, expert consensus and literature reviews, many health professionals and organizations support the tax on sugar-sweetened beverages and demonstrate the benefits of such a measure, including the Institute of The Heart and Stroke Foundation, Olivier De Schutter, the United Nations Special Rapporteur on Medicines and Health, and the World Health Organization (WHO). The American Academy of Medical Royal Colleges, the Dietitians of Canada and the Canadian Diabetes Association.

In November 2012, an Ipsos poll showed that 79% of Quebecers wish the institution of sugary drinks’ fees (soft drinks, energy drinks, etc.), that would be paid to the government by bottlers et whose revenue would be invested in obesity prevention.