There’s been an outcry after the government announced a delay in the “sugar tax” increase in last week’s Budget speech, with health experts and activists saying that coupled with “ineffective increases” in other health related taxes on alcohol and cigarettes, the decision puts millions of people’s lives at risk of serious disease.
The two-year moratorium on increasing the Health Promotion Levy (HPL) appears to be in response to calls from the sugar industry to freeze the tax, to try to protect a devastated, ailing sector, reports Daily Maverick. The inflationary increase in the HPL announced in the 2022 Budget was also paused, until April 2023, for the same reason.
Civil society coalition Heala, the Healthy Living Alliance, said that Treasury’s decision, coupled with the minimal tax increases on alcohol and tobacco, “is a direct attack on the lives of millions of people at risk of serious health conditions like diabetes, cardiovascular diseases and cancer”.
The SA Sugar Association (Sasa) and the SA Cane Growers’ Association have been lobbying the government to freeze or scrap the HPL altogether. Simultaneously, civil society has been asking the government to increase it from 11% to 20%, in line with a World Health Organisation (WHO) recommendation for countries to impose sugar taxes to help prevent obesity and related diseases.
“I’m astonished that the government cares so little about the health of its citizens,” said Professor Karen Hofman, a leading researcher in sugar and other health-related taxes and director of Priceless, a research team at the Wits School of Public Health.
“This has been going on for six years, and the cost of the Treasury inaction is extremely high in terms of the health of South Africans and obesity-related conditions, which were the cause of many thousands of deaths from Covid,” Hofman told Maverick Citizen.
“This is pure pandering to the private sector. Government seems perfectly able to deal with alcohol and tobacco, and the fact that this has not even increased by inflation is a serious omission by the Treasury that will have consequences for years to come in terms of obesity-related conditions.”
In 2017, when the Treasury first proposed the tax, the rate was 20%, in line with the WHO’s recommendation, but a year of “public consultation”, including lobbying by the South African sugar industry, currently on its knees, resulted in a reduction of the tax to 10%. (It was implemented one year later at 11%, to account for inflation.)
“There will never be a rationale for the decision to deviate from the government’s constitutional obligations just to satisfy the sugar industry and other big business,” said Heala’s programme director, Nzama Mbalati, after the Budget speech. “This decision is not in the interest of ordinary people, instead, it puts profits ahead of people.”
The tax has been fiercely contested territory since the government introduced it in 2018, charging drinks manufacturers 2.1c for every gram of sugar above 4g per 100ml.
The beverage industry responded by passing the tax on to consumers and also reducing the quantity of sugar in their drinks by replacing it with non-nutritive sweeteners, which may also have harmful effects on human health. (Impending front-of-pack labelling legislation will include warning labels for foods and drinks containing artificial sweeteners.)
The HPL was designed to support the Department of Health’s aim “to decrease diabetes, obesity and other related diseases in South Africa”, according to SARS, by reducing consumers’ purchases of sugary drinks and thus lowering their sugar intake.
Yet revenues from the tax – more than R10bn so far, with an anticipated R2.3bn more in the year ahead – have not been manifestly spent on health promotion of any sort, much less on obesity and related disease programmes.
Sugar consumption has been proven by scientists, in South Africa and many other countries, to be a major cause of high rates of obesity and type-2 diabetes.
In 2018, diabetes was the second-largest cause of death among South Africans, after TB. At least 4.2m adults in the country are diabetic. Around half of all adults in South Africa are overweight (23%) or obese (27%), and about 12m people suffer from weight-related diseases – such as diabetes, hypertension, cardiovascular diseases, arthritis and some cancers – for which they receive treatment in the public sector, says Wits researcher Micheal Boachie. (In financial terms, this costs the national health system at least R33bn per year, the same team at Wits showed last year.)
Liquid sugar in particular is considered especially harmful: Research in 2015 published in Global Public Health shows that drinking even one sugary beverage a day increases an adult’s likelihood of being overweight by 27%, and a child’s by 55%. South African nine- and 10-year-olds drink an average of 254 Coca-Cola products per year (compared with the global average of 89).
The sugar tax is working but … show us the money?
In 2021, further research from Hofman’s team at Wits showed South Africans were buying 28% fewer sugary drinks since the HPL was launched in 2018. Meanwhile, billions have flowed into the national coffers from the HPL revenues – on average R2.5bn annually since its launch.
Of the R10bn raised by June 2022, only R50m per year had been allocated to the Health Department, as “additional funding”, the Treasury said, “to support health promotion and chronic disease prevention programmes” for 2021. That’s less than 2% of the total sugar tax revenues. But even so, there has been no public accounting of that amount.
When Maverick Citizen asked the Treasury in 2022 to itemise how HPL revenues have been spent so far, and whether it planned to dedicate those revenues to health-specific interventions or anti-obesity measures, it replied: “The revenue is not earmarked or ring-fenced for any particular expenditure but accrues to the National Revenue Fund for general government expenditure, as per the approved budgets.”
Is government serious about improving public health?
In 2022, a small inflationary increase, from 2.21 to 2.31 cents was announced, but its implementation was postponed to April 2023 because of the moratorium on a tax increase negotiated as part of the Sugar Masterplan, which aims to protect the local sugar industry by ensuring 95% of all sugar used locally is procured locally and to double the local demand for sugar.
Sasa said changes in the HPL that reduce the demand for sugar could put 6 000 jobs and the livelihoods of 3 000 small-scale farmers at risk, and urged the government to pause any increase or expansion of the sugar tax (to include 100% fruit juice, for example) while it implements plans to diversify uses for sugar cane apart from refined sugar.
Hofman said that the Sugar Masterplan has been in place for several years now, but the “innovative” private sector had done nothing to address the repurposing of the sugar industry.
Both Hofman and Heala’s Mbalati said the sugar industry had been under pressure for decades, long before the HPL’s launch.
“The sugar industry fails to mention how much the illnesses caused by their products is costing taxpayers,” Mbalati said before the Budget speech. “The industry should begin addressing its own inefficiencies that affect jobs and stop scapegoating the HPL.”
So how much sugar is actually in our cold drinks?
The tax means many mainstream sodas now have less sugar and more artificial sweeteners. But supermarkets still stock numerous original and private label options across a spectrum of sugar quantities, reports Business Insider.
The HPL also upended how fizzy drink companies produce their products, after the government instated the threshold of four grams of sugar, meaning the first four grams of sugar per 100ml of soda doesn’t attract any tax.
So what most manufacturers have done is slash the sugar content of most of their beverages to at or just below this level, introduced low or no sugar variations, and in some cases, increased the presence of artificial sweeteners (which early research suggests is also problematic).
After the initial sugar threshold, fizzy drink makers pay 2.21c per gram. This could, theoretically, increase the price of a typical sugary soft drink by several cents a can/bottle, complicating matters for entry-level sodas.
It’s also why many premium beverages, like pricey sports and energy drinks, fancy private label mixers, and a few alcohol alternatives, have essentially left their sugar quantity unchanged.
Business Insider looked at the nutritional information of more than 40 fizzy sodas, soft drinks, mixers, and alcohol alternatives, examining many of South Africa’s most popular variants.
We found most mainstream brands had cut their sugar content to at or below the threshold, or introduced some “low kilojoule” or no-sugar alternatives.
We also found some discrepancies between posted nutritional levels, what we saw in stores, and what manufacturers claim on their websites. When in doubt, we used official information published on manufacturers’ websites, where available.
Given that no one is likely to drink just 100ml of soft drink, we assumed an average serving of 300ml.
And to help visualise grams of sugar per millilitre, we included a conversion of this into an average number of teaspoons, following the generally accepted standard that one teaspoon holds about 4g of sugar.
Of the drinks checked, it was found that those with the highest sugar content tend towards the premium market.
Many are private-label products sold by Woolworths. Although, to their credit, Woolworths is the only mainstream retailer that consistently posts nutritional information about its products online, it still sells a vast range of custom-branded products with high sugar content in this category.
The drink with the highest sugar content in the country is Woolworths Rosé Sparkling Grape Juice, with 13.6 grams of sugar per 100ml. This means a single 750ml bottle of this juice has 102 grams of sugar – roughly 26 teaspoons, or half a cup.
Woolworths Passionade follows closely, with 3.35 teaspoons of sugar per 100ml – or nine teaspoons per 275ml bottle.
Grapetiser, both red and white, is not far behind. Each has 3.13 teaspoons of sugar per 100ml, or 8.5 teaspoons, in their single-serving small bottles.
Several Woolworths brand sodas follow with between 12.3 and 11.4 grams of sugar per 100ml, before the energy drinks and Coke appear.
Red Bull has 11g of sugar per 100ml – meaning a standard 250ml can has just under seven teaspoons of sugar. If you drink their larger 500ml can, you'll get just under 14 spoons.
Monster Energy Original has the same sugar quantity per 100ml as Red Bull – but its single cans start at 500ml. This means one can of Monster Original Flavour packs in 55g of sugar, or just under 14 teaspoons.
Energy drink Score is similar to Monster. Its standard 500ml can means a single serving dishes up to under eight teaspoons of sugar.
And to go with both Monster Energy and Score are the highest levels of sodium we found in a single serving. One can of Monster Energy has 385g of sodium, and one can of Score has 435mg.
Coke Original wasn’t far behind. Although the Coca-Cola company has introduced several low or no-sugar equivalents of this and several other drinks in its stable, original Coke still has 10.6g of sugar per 100ml, or about eight teaspoons per 300ml can.
Many other fizzy drink products are seemingly unconcerned by sugar tax restrictions.
Most private-label colas and sparkling drinks we checked hover around the 10g per 100ml.
And tonic water across most brands are consistently high in sugar – all brands we checked had more sugar per 100ml than sports drinks like Powerade and Energade.
Included on the selection tested were Bonaqua Sparkling Litchi with 3.9 teaspoons of sugar per 100ml, Fanta Orange with 5.7 and Sprite with 3.1, among others.
See more from MedicalBrief archives:
No proof yet that sugar tax has led to obesity decline, say cane growers
WHO plans sugar taxes and restrictions on marketing unhealthy foods to children
Finance minister delays increase in SA sugar tax for 12 months
International call for South Africa to double its ‘sugar tax’