Taxing sweet snacks may bring greater health benefits than taxing sugar-sweetened drinks: UK study

30 Apr 2018 --- Adding 10 percent to the price of chocolate, confectionery, cakes and biscuits may reduce purchases by around 7 percent, according to a research team from the London School of Hygiene & Tropical Medicine, the University of Cambridge and the University of Oxford. This is a similar outcome to taxing sugar-sweetened beverages, where previous research suggests a 10 percent price rise can reduce purchases by 6-8 percent. The researchers suggest that extending fiscal policies to include sweet snacks could be an important boost to public health, by reducing purchasing and consumption of these foods.

The study found that taxing sweet snacks could have knock-on effects on the sales of other food items, reducing the purchase of soft-drinks (by 0.6-0.8 percent), biscuits and cakes (1.2 percent) and savory snacks (1.6 percent).

This study, funded by the UK National Institute for Health Research Policy Research Programme, is the first to provide a direct analysis of the relationship between price increases and consumer demand for snack foods across different income groups.

Household expenditure on food and drink items were classified into 13 different groups and examined in a national representative sample of around 32,000 UK homes. Purchasing was examined overall and then compared across low-income, middle-income and high-income households. The data (from Kantar Worldpanel) covered a two-year period in 2012 and 2013, and provided complete details of each sales transaction, in addition to social and demographic information for each household. To estimate the change in purchasing, the researchers applied a specialized tool for studying consumer demand.

The researchers found that increasing the price of sweet snacks led to a decrease in purchases and may have wider effects on purchasing patterns, which they suggest could potentially bring additional benefits to public health. For example, increasing the price of chocolate snacks was estimated to bring about significant reductions in purchases across most food categories, while a price increase on biscuits showed a potential reduction in the demand for cakes (2.3 percent) as well as chocolate and confectionary (1.7 percent).

The study is an observational analysis and cannot explain why consumers change their purchasing behavior but, although some uncertainty remains, the researchers say the associations observed suggest that relevant policies and future research should consider a broader range of fiscal measures to improve diet than is currently the case.

“We know that increasing the price of sugar-sweetened beverages is likely to generate a small, but significant, reduction in their purchase. However, there has been little research on the impact that a similar price increase on other sweet foods such as chocolate, confectionery, cakes and biscuits could have on the purchase of sugar. This research suggests that taxing these sweet snacks could bring greater health gains and warrants detailed consideration,” says lead author Professor Richard Smith from the London School of Hygiene & Tropical Medicine.

The potential effects of price increases were greatest in the low-income group. Increasing the price of biscuits was linked to a reduction in the purchase of chocolate and confectionery for the low-income group (3 percent if price increases by 10 percent). No such reductions for the high-income group were seen. Increasing the price of chocolate and confectionery was estimated to have a similar effect across all income groups.

The authors acknowledge limitations of the study including the exclusion of purchases of foods and drink bought and consumed outside of homes (e.g., in restaurants) which they say are likely to be greater among higher income earners.