Sugar tax crammed down nation's throat

Photo: SCANPIX

Social ministry considers not resistance by nutrition experts and is unwilling to leave sugar tax out of nutrition policy green book. 

«This summer, the green book working group decided that sugar tax is not needed as the measure is ineffective – not improving national health,» said working group member and Estonian Food Industry Association head Sirje Potisepp. Great was the group’s surprise when in the final version distributed on November 19th the sugar tax chapter was again included. On top of that, there was a chapter on food ingredients chapter that the working group had never even discussed.

The so-called sugar tax would be used to raise the price of food deemed unhealthy. Most frequently they cite energy drinks. In the coalition treaty, taxation thereof is named an idea worthy of analysis.  

Meanwhile, the sugar tax is being resisted both by nutritionists in the working group and children’s doctors. Describing the meeting on December 3rd, the food association head pulls out all the stops. «For hours, four-five officials at the ministry sat red-faced at the table, speechless, ebcause the ministry’s vice chancellor Ivi Normet issues orders and fires shots,» said Ms Potisepp.

She said Ms Normet refused to set up the tax proposal to be voted again, and to remove it from the document. «I asked what was the sense to convene if they just ride over us like that,» recalls Ms Potisepp.

Tallinn Children’s Hospital endocrinologist Ülle Einberg called the last meeting a serious controversy. Personally, she is against the sugar tax.

«I am convinced that the imposing of sugar tax will not help alleviate overweight neither the related diseases,» she said, explaining that sugar is vital for producing foods and drinks and eating a sensible amount of confectionery is no hazard at all to children’s health.

«Sugar is widely used in food industry and sugar tax would spell higher prices for lots and lots of products which would pose a problem for worse off families,» said Ms Einberg.

The doctor went on to explain that overweight and obesity could be tamed not by tax but by education alone. «[Just] stop the excessive eating of sugar and energy rich foods and do regular sports-exercise,» she suggested.

Sirje Potisepp said a leading Estonian nutritionist Mihkel Zilmer wanted to exit the working group after the meeting, not wishing to be associated with the document. Personally, Mihkel Zilmer would neither confirm nor decline the talk yesterday.

According to Sirje Potisepp, the producers have nothing against the other idea in the green book tax chapter – to introduce tax incentives regarding fruit and vegetables. «It cannot be said we are against the entire chapter because five percent of it talks about tax incentives and that we do support,» said Ms Postisepp.

Referring to other nations’ experience, the food union head said that sugar tax never improves national health but fills the coffers of leftish governments. «We cannot pull a bag over the food sector head. All the obligations in the green book are regarding industry alone, the state assumes no task,» she said, indignant.

To cite an example, she pointed to the chapter in the book that covers exercise. «All studies indicate we move not at all. Shall we impose an exercise tax?» she asked ironically.

Ms Potisepp said the sugar tax may lead to industrial use of sugar substitute which may not be healthier. The food association head said the state fails to consider the effect of the tax on food industry. «The Estonian industry which has raise salaries on account of profits will just not survive it,» she assessed.

A. le Coq chief Tarmo Noop said that in the EU the sugar tax is a stage that has been passed and nations like Denmark and Finland intend to give it up. «There is no clear evidence that a tax like that would cut overweight, but it does have a very bad effect on competitiveness of industry,» said Mr Noop.

According to Mr Noop, their company has continually been cutting sugar content in their production but this cannot go on endlessly. «Among other things, people do want things to be tasty and we cannot sacrifice that,» said the beer brewer. He thinks the tax would make matters worse as sugar would be replaced with substitute. «Sugar will indeed disappear from the products, but sugar substitutes will rather boost the need in people for sugar and it will be compensated with other products. Thus, all told nothing changes in consumption or will rather grow worse,» he suggested.

Mr Noop said consumers should be the ones to judge by product information whether to consume something or not. «Such intervention is wrong we think, if the state wants to take such decisions for the people,» said Mr Noop.

Comment

Finance ministry tax and customs policy vice chancellor Dmitri Jegorov

We have hears of several green book ideas but we cannot speak about agreements because these either have not been reached or at least the information has not reached the officials.  

A clause in the governmental action programme relates to energy drinks and the need to consider excise on these. But not even in that have the opinions yet been formed. With the rest of the ideas, it is far from a proposal as yet. They are rather talking about research, analysing other nations’ experience, and certain variants on the basis of that for Estonia.

Estonia has not lowered tax rate for foods not is there any agreement to impose that. Technically it is ineffective as the wealthiest gain most financially. In Estonia, 22 percent of the population live in relative poverty, but lowered tax rate would be a gain to those 78 percent who do not need it.

In that sense, a sugar and fat tax which raises the prices of foods deemed unhealthy is more expedient though examples of failure are also found in the world. Alcohol, for instance, isn’t made less attractive by lowering VAT on bottled water and milk, but by raising alcohol excise year after year.