School of Nursing
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Would having a Sugar-Sweetened Beverage tax reduce childhood obesity in New Zealand?

Rachel Miller

Main Content

Rachmiller127@gmail.com

Introduction

In New Zealand one in nine children were identified as being obese in 2016 (Ministry of Health, 2017). The Ministry of Health has identified obesity as an important health issue that needs to be addressed (Ministry of Health, 2016), and defines obesity as any individual who has a BMI greater than 30kg/m²  (Ministry of Health, 2015a). One strategy that New Zealand has not yet implemented to try to combat the obesity epidemic is a Sugary- Sweetened Beverages (SSB) tax. The literature review focuses on a SSB tax and childhood obesity. From the literature, recurring ideas include the reduction in consumption found in countries that have already implemented a SSB tax, as well as what tax would be the most effective. The literature also linked SSB tax to a decrease in obesity. It also explores the financial benefits of such a tax. The literature review will help form recommendations around introducing a SSB tax in New Zealand

PECOT model

Child obesity is a topic of particular interest to many. A broad review of the topic found alarming statistics within New Zealand. It was also found that SSB’s are a leading cause in childhood obesity. These findings instigated further exploration into the clinical issue as it is clearly a current issue. To formulate the question, a tool developed by Rod Jackson called PECOT was used. PECOT will assist with breaking down the question in order to help uncover relevant literature and make the question more clear and concise (Schneider, Whitehead, LoBiondo-Wood, & Haber, 2013 pp.44). Through PECOT the question was refined from “how to stop or reduce childhood obesity in New Zealand” to “Would having a 20% sugar-sweetened beverage tax reduce childhood obesity in New Zealand?” Below is the table created by the PECOT tool that shows the rational behind the question.

Clinical issue

This research question is a highly current issue in New Zealand because of the extremely high level of children becoming obese. Ludwig, Peterson & Gortmaker (2001) examined the consumption of SSB and its association with obesity in children. From their research they found a definite link between the two, reasons for this include the intense marketing company’s do towards children, how cheap and accessible they are and the addictiveness of the beverages (Avena, Rada, & Hoebel, 2008). SSB have no dietary purpose yet a New Zealand study found that children aged 5-14 were consuming SSB that accounted to 24% of their daily sugar intake (Mhurchu, Eyles, Gene & Blakely, 2014). Obesity is a big issue in children because they are more likely to be obese when they become adults and are more likely to develop other serious illnesses such as type two diabetes, cardiovascular disease, stroke, sleep apnea and cancer (Sahoo, Sahoo, Choudhury, Sofi, Kumar, & Bhadoria, 2015). New Zealand cannot not afford to have these generations grow up to be obese as it is a large burden on the health care system. The University of Auckland has found that obesity is costing the Country between $722 - $849 million a year in health care costs (The cost of obesity, 2012). This signifies how much of a drain obesity is on health resources even though it is a preventable condition. New Zealand based organisations including Diabetes New Zealand, Heart Foundation, Dietitians NZ, New Zealand Dental Association are all for a SSB tax (Change, n.d)

Evidence-based discussion

To answer the question “Would having a 20% sugar-sweetened beverage tax reduce childhood obesity in New Zealand?” a range of information needed to be explored around a SSB tax by exploring completed studies to see if it is worth implementing. The initial question centred around whether or not price would have an effect on consumption. Currently SSB are easily accessible and affordable. This is why there is such a large consumption rate as in some cases they can be cheaper than bottled water (ChangeLab Solutions, 2012). If the price of SSB increased the demand would decrease to a degree depending on the significance of the difference, as they are not a necessity (ChangeLab Solutions, 2012). Fletcher, Frisvold & Tefft (2009) found that increasing the price of soft drinks through a tax would lead to reductions in soft drink consumption by children and adolescents. This is because children are more likely to have to spend a large amount of their income on soft drinks in comparison to adults (Fletcher, Frisvold & Tefft, 2009) Therefore this would be more responsive to change in price, this would also affect the lower socioeconomic population (ChangeLab Solutions, 2012). Whereas high socioeconomic population will be less affected as they can afford the change in price (ChangeLab Solutions, 2012). This is beneficial because by increasing the price it will deter consumers to buy it and look for a better alternative. To make an impact the price increase will have to be substantial. A price increase in SSB is a preventive strategy that will affect the consumption due to economic demand.

Many Countries and States believe that a price increase in SSB will have an impact on obesity (Colchero, Popkin, Rivera and Ng, 2016). The research found during the literature search was from Mexico and California. Mexico identified obesity as a major issue and so in 2014 implemented a 1 peso per litre excise tax to SSB. This lead to a 10% increase in price for consumers. Colchero, Popkin, Rivera and Ng (2016) conducted a study to evaluate the effectiveness of the tax in regards to reducing consumption. The study is observational and followed 50,000 individuals pre and post tax (Colchero et al. 2016).  The study found that there was a 12% decline in SSB consumption as well as a 4% increase in non-tax beverages such as bottled water (Colchero et al. 2016).   Another important statistic they found was the amount of revenue made from the tax was US $2.6 billion and was being used to install water fountains in schools (Colchero et al. 2016). This is a promising outcome that shows that the SSB tax is fulfilling its role.

In 2014 Berkeley, California became the first US jurisdiction to pass an SSB excise tax to reduce obesity and other health issues. A $0.01-per-ounce tax on distribution of SSB’s was implemented (Falbe, Thompson, Becker, Rojas, McCulloch & Madsen, 2016). Research completed by Falbe et al, (2016) measured the effectiveness of the tax after four months of the strategy being put in place. This study was a cross- sectional design that examined pre and four months post tax (Falbe et al, 2016). They had a huge result of 21% decrease in SSB intake (Falbe et al, 2016). There was only an equivalent to about an 8% price increase that reached consumers (Falbe et al, 2016). Government revenue from the SSB tax is estimated to be $940.4 million in California (Falbe et al, 2016). Showing that in this case the price decreases even more substantially than in Mexico.

The literature discusses the possible health outcomes after introducing a SSB tax. A study completed in the UK by Briggs, Mytton, Kehlbacher, Tiffin, Rayner, & Scarborough, (2013) outlined the effect of a 20% tax on obese and overweight people in the UK. It is an econometric and comparative risk assessment modelling study that concluded a 20% tax on sugar-sweetened drinks would lead to a decline in obesity prevalence in the UK. Results estimated a reduction of obesity by 1.3% (180 000 people) as well as 0.9% (285 000) overweight people (Briggs et al. 2013). The most affected age range was individuals thirty and below as they have the highest consumption rates (Briggs et al. 2013). This is a large percentage of people that will gain from a SSB tax. A study by Mhurchu, Eyles, Gene, and Blakely (2014) explores the overall health benefits of a SSB tax in New Zealand. They used a range of available data such as price elasticity data and population disease-specific mortality rates to help estimate how many deaths could be prevented with a 20% tax. They found it would prevent or delay approximately 67 deaths from diabetes, cardiovascular disease and diet-related cancers per year.  In one year 3000 deaths in New Zealand were attributed to being overweight and obese (Ministry of Health, 2003). Children are not dying from being obese but this is what their future looks like if they continue to be at an unhealthy weight into their adulthood.   

Wendt and Todd (2011) completed a study on SSB price increase and children’s BMI. These authors found a 10% price increase for SSB one-year prior is associated with a decrease of 0.42% in the average child’s BMI (Wendt & Todd, 2011). The study was completed in the US and followed children as they age from 5 to 14 years old (Wendt & Todd, 2011). This is a small change in weight; therefore the tax percentage would have to be greater to have a more substantial impact on children (Wendt & Todd, 2011).  This study does prove that increase in prices reduces demand for the product, as people are not willing to pay for the commodity (Wendt & Todd, 2011).  The evidence found so far in relation to evidence of weight reduction is small in magnitude. There is no factual information at the moment so these findings are based on calculations. This is because the majority of the SSB taxes have only just been implemented so only show a short-term impact. In this case it still shows a positive impact, as there is a trend of weight loss although it is very minimal there are other positive results of a SSB tax it makes it a strategy that impacts obesity in more than one way. This further backs up the argument that to tackle the obesity epidemic there needs to be multiple strategies working together.

A SSB tax provides revenue for the Government to use to further reduce childhood obesity. A New Zealand based study written by Mhurchu, Eyles, Gene and Blakely (2014) focus on the revenue that could be gained through a 20% SSB tax. These authors looked at household food expenditure in New Zealand and found that nationally we spend $257 million each year on sugar-sweetened beverages (Mhurchu et al, 2014). Their research has estimated that New Zealand would generate around $30 - $40 million of revenue per year (Mhurchu et al., 2014). This is much needed revenue as obesity is an increasing burden on the healthcare system (Mhurchu et al, 2014).  The authors suggest that the money should be invested in programmes to improve population health. In relation to childhood obesity it could focus on banning advertisement of SSB aimed at children or go towards educational programmes. The information that the New Zealand study found aligns with other literature from other countries. In America a national cost-effectiveness study found that one cent per ounce SSB tax would save $23.6 billion in health care costs over a 10-year period, prevent obesity related illness and death, and generate $12.5 billion in annual revenue. (Long, Gortmaker, Ward, Resch, Moodie, Sacks, Swinburn, Carter & Wang 2015).

The literature highlighted that there is no real negative around a SSB tax. Some unreliable literature did claim that a SSB tax would be regressive. Articles by Cabrera Escobar, Veerman, Tollman, Bertram, and Hofman, (2013) and Brownell, Farley, Willett, Popkin, Chaloupka, Thompson, & Ludwig, (2009) discuss why it would be regressive and why it wouldn’t have a negative effect. The idea is that because it is regressive that it would negatively affect the low socioeconomic families (Cabrera et al., 2013). Lower-income households are more likely to spend a greater portion of their income on consumable goods than higher-income households (Cabrera et al., 2013). Relative to income, a SSB tax would therefore affect low-income people the most (Brownell et al., 2009). This may be true but sugar sweetened beverages are commodities that are not a necessity to survive (Brownell et al., 2009). Therefore the lower socioeconomic families would actually benefit hugely from a SSB tax because they will have to reduce their intake.

The World Health Organisation (2016) recently recommended that governments should impose a tax on sugary drinks as a means of combating the obesity epidemic. An article written by Littlewood (2016) explores how imposing a SSB tax would happen. He first recommended through his research who should pay. The best approach would be to solely impose the tax on manufactures and importers; therefore they will have to increase the prices therefore passing the cost burden to consumers (Littlewood, 2016). In terms of what should be taxed he suggests that it should be carbonated drinks that have a 2% sugar content or more (Littlewood, 2016). This would include drinks such as coca cola, lemonade and many more (Littlewood, 2016). Lastly what kind of tax it could be ad valorem (according to value) or per unit (Littlewood, 2016). Ad valorem can be explained by 20 per cent of the price at which the product is sold. Compared to a per unit tax it would be a certain amount per unit. He concluded that per unit would be more beneficial as it would be cheaper and easier to implement (Littlewood, 2016). Ideally the increase would be 20% in price as a study by Briggs, Mytton, Kehlbacher, Tiffin, Rayner, & Scarborough, (2013) looks at a 10% tax that many countries such a Mexico implement and found that it has half the effect of a 20% tax with only a 0.6% reduction in obese people. If a SSB tax strategy was put in place this would be the recommended type of tax that should be created.

Implications for practice

Implication for practice can be viewed in two ways. Implications for nurses if a strategy such a SSB tax is not implemented and implication if it is put in place. Obesity is a huge burden on the healthcare system costing between $722 - $849 per year (The cost of obesity, 2012). Along with this obese people in a hospital setting are taking up more resources and evidently have longer hospital stays (Sadr, Bellocco, Eriksson, & Adami, 2006).  This is going to put a strain on hospitals and therefore nurses. Another implication will be the increase of comorbidities in obese children such as poor oral health and type two diabetes. Nurses need to realise that childhood obesity is becoming a growing issue and get behind the introduction of a SSB tax. Future generations of adults will potentially have higher rates of obesity and comorbidities that the health system will not be able to keep up with. Nurses are key to promoting a healthy lifestyle. Within this they have a duty to discourage the consumption of SSB and promote the intake of water (Jebb & Sritharan, 2005). This is essential for children as they are one of the biggest consumers. Nurses need to have adequate knowledge around SSB and their limited nutritional value and poor health consequences. Also be able to explain the implication of a child being obese and the effects it will have now and later in life. A SSB tax will not be able to fight the obesity epidemic in children alone. Public nurses have a huge opportunity to do so especially Plunket nurses as they are involved with assisting parents with raising a healthy child (Ministry of Health, 2015b). Plunket is involved with before school checks. This is where they should begin to ask how many SSB are being consumed and then from there educate the family.

Recommendations

From the literature, a series of recommendations are formed. These are suggestions as what may need to happen to successfully improve the future health status for New Zealand children. Obesity rates are at an all time high and more strategies need to be implemented to make an impact. The first recommendation is that the Government needs to impose a 20% excise SSB tax in New Zealand. From this research, a range of promising results were found. Mexico and California show that an increase of price of ssb will decrease the consumption rates. This is exactly the results that were wanted to see as SSB is a leading cause of obesity in children, so we want to deter children from consuming them. From a reduction in consumption studies have calculated that weight will be lost and deaths will be prevented through a SSB tax. For it to be effective the tax should have a 20% pass through rate to the consumers so the increase will be enough to deter people from purchasing them. On top of this a SSB tax has economic benefits. New Zealand’s government could bring in $30-40 million in revenue (Mhurchu et al, 2014). Some of the revenue could go to reducing the burden on the healthcare setting or it could go towards funding other strategies.

The second recommendation is that New Zealand needs a range of different strategies and programmes to reduce obesity. Literature identified that a SSB would not be able to reduce the obesity rate to a minimal level on its own. As there are other factors that are causing children to become obese. For example there could be more educational programmes introduced aimed at children and their parents around a healthy lifestyle. Or a programme similar to the one in Mexico around ensuring all schools has access to safe drinking water. These strategies and programmes can be partially funded through the revenue collected through the SSB tax.

The final recommendation is that Registered Nurses need to be more aware of the concerning number of children who are obese. They also need to be active educating the general public around child obesity. They must have knowledge around the factors that lead to children becoming obese including SSB consumption. Along with this they must be able to articulate to the parents that if a child is obese there is a high chance that it will lead to detrimental health consequences now and in their future.

Conclusion

The evidence around a SSB tax has been examined and analysed, which has increased awareness of the seriousness of childhood obesity. Childhood obesity is a current health issue in New Zealand that needs to be resolved. Findings from the literature clearly show that introducing a SSB tax would have a positive outcome in reducing childhood obesity. This lead to the formation of recommendations that a SSB tax should be implemented in New Zealand. In relation to clinical practice nurses have an important role in education families around the detrimental health impacts of childhood obesity.

References

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Briggs, A., Mytton, O., Kehlbacher, A., Tiffin, R., Rayner, M., & Scarborough, P. (2013). Overall and income specific effect on prevalence of overweight and obesity of 20% sugar sweetened drink tax in UK: econometric and comparative risk assessment modelling study. British Medical Journal, 347.

Brownell, K. D., Farley, T., Willett, W. C., Popkin, B. M., Chaloupka, F. J., Thompson, J. W., & Ludwig, D. S. (2009). The Public Health and Economic Benefits of Taxing Sugar-Sweetened Beverages. The New England Journal of Medicine, 361(16), 1599–1605.

Cabrera, M. A., Veerman, J. L., Tollman, S. M., Bertram, M. Y., & Hofman, K. J. (2013). Evidence that a tax on sugar sweetened beverages reduces the obesity rate: a meta-analysis. BMC Public Health, 13(1072).

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