Worldwide, rates of obesity and type 2 diabetes are increasing—with profound social and economic consequences. The rise of these diet-related chronic diseases is closely linked to the globalization of unhealthy lifestyles, and especially the proliferation of high-sugar food products. To advance conversation on how to create a cross-sector approach to diet-related chronic disease, Oliver Wyman is hosting a breakfast panel in Davos, Switzerland, during the World Economic Forum annual meeting in January. Oliver Wyman's Public Health Leader Crispin Ellison provides more context below on the worldwide sugar challenge:
It is not news that there is a global obesity epidemic. A third of the world’s population is now overweight or obese. Diabetes, which is closely linked to obesity, affects nearly 10 percent of all adults. Each year, at least 2.8 million people die as a result of being overweight or obese, and a conservatively estimated 1.5 million deaths are directly caused by diabetes.
Over the past 50 years, worldwide sugar consumption has more than tripled. This increased consumption is believed to be driving the rise in obesity and diabetes, as high intake of free sugars—particularly in the form of sugar-sweetened beverages—is associated with weight gain in adults and children.
As more people gain easy access to processed food products, sugar consumption rises. Today, individual sugar consumption is rising fastest in low- and middle-income nations, and sales of sugary drinks are increasing sharply in developing nations. Sugar-sweetened beverage sales in India for example, have increased by more than 10 percent year-on-year since 1998.
Correspondingly, obesity rates are rising fastest in developing nations. What was once a problem associated with wealthy nations is now a truly global epidemic. And within wealthy nations, the problem is heavily weighted towards the more deprived population segments.
Setting sugar targets
To address this sugar-fuelled crisis, the World Health Organization (WHO) recently issued guidelines for daily intake of free sugars. For the greatest health benefit, WHO recommends that individuals cut free sugars back to less than 5 percent of total energy intake. That’s about 25 grams or six teaspoons/day—a far cry from the 152g/day that adults in Brazil consume, the 108g/day in Russia, the 104g/day in Mexico and the 62g/day in Pakistan.
Nonetheless, governments around the globe are adopting similar sugar-intake targets. Public Health England (PHE), for example, recently set a 5 percent daily-intake goal for UK residents. According to PHE, achieving that goal could greatly improve the nation’s health outcomes and save around £500m each year.
But easier said than done. Currently, children and teenagers in England consume about three times that much; adults in England about twice that much. To get closer to 25g, PHE issued recommendations for how to lower individual sugar consumption. Among the more controversial measures suggested was the introduction of a sugar tax of 10 percent to 20 percent on high-sugar food products.
The sweet—and sour—of a sugar tax
Many in the healthcare sector advocate this sort of tax, and cite the successful impact tobacco taxes had on smoking rates. Mexico adopted a peso-per-liter sugar tax back in 2013 and soda consumption seems to be on the decline there. A similar soda tax went into effect this year in a district in California, although it is too early to see the impact. Consumers in England seemed to embrace the idea: In October, The Observer reported that public support for a sugar tax was 53 percent. But history shows that voters may support taxes in abstract, but often change their views when they have to pay.
Not everyone is on board, however. Many tax and behavioural experts question the efficacy of such a tax unless it is imposed at very high rates (as for tobacco). And when the price differential between different brands of sugary drinks can be over 100 percent, there is a question as to how much a tax of 5 to 10 percent would be noticeable.
Opponents of sugar taxes also argue that by their very nature, such taxes are regressive, and the poor will disproportionately feel the impact. Also, it’s worth noting that other countries, such as Holland, have taxed sugary drinks for many years, but the impact these have had on sugar consumption is moot. And the ‘fat tax’ in Denmark did not deliver the expected impacts on dietary habits.
No silver bullet
The sugar tax is off the table (for now) in England—Prime Minister Cameron killed the possibility in late-fall, saying there were more effective ways to combat obesity. Though health advocates were disappointed with the UK Government’s response, they may find consolation in the fact that the sugar tax was never advanced as the silver bullet for ending the obesity epidemic. In truth, decreasing sugar consumption is a complex challenge that requires a broad, multi-faceted approach. A sugar tax could be part of that approach, but it is not the only measure needed.
To effectively reduce sugar consumption, leaders from the health, food and retail industries must come together with government officials to formulate new, cross-industry strategies. While there are significant differences between the sugar issue and the campaign to reduce smoking—namely that the challenge with sugar is to tackle over-consumption, not stop its consumption altogether—there are still a number of lessons that can be taken from the smoking arena. Most significantly, any effort must align all sectors effectively and, where possible, avoid demonising the food and retail industries. A cross-industry approach that requires the various players to work together is the only one that will be truly impactful.
And given the profound health and economic consequences of today’s obesity crisis, an impactful solution is what is critically needed.