Soda Taxes Can Protect Health in Asia
Ripe for a sin tax.
There are many, many more Asians than there are Americans, but a far smaller share of them have enjoyed a refreshing cola lately. Global soft-drink makers view this as an opportunity to hook new customers. For Asian governments, it’s a public health challenge -- one they can meet by levying soda taxes.
Sugary drinks, along with the many other processed foods that contain added sugar, are a primary driver of the obesity epidemic: Some 41 million children under the age of 5 worldwide are overweight or obese, nearly half of them in Asia. Added sugar also contributes to the skyrocketing incidence of diabetes, as well as heart, liver and kidney diseases.
In more affluent countries, where people are increasingly aware of sugar’s ill effects, per-capita consumption is declining. But it’s rising fast in India, Indonesia and other developing countries, as big soda makers push for new customers. Coca-Cola intends to invest more than $10 billion to grow its business in India, China and the Philippines alone. Big Tobacco once followed a similar strategy, seeking out customers among the rising middle and lower-middle classes of Asia as the developed world clamped down on smoking.
Asian countries can easily avoid falling into the same trap with sugar, and some of them already recognize it: The Philippines, India and Indonesia are all considering substantial taxes on sugary drinks.
Such measures can drive down soft-drink consumption, as Mexico’s experience shows. Just one year after its soda tax was put in place, purchases of sugary drinks in the country fell substantially. Other measures -- restrictions on advertising, bans in schools, front-of-pack labels highlighting the dangers of sugar -- haven’t been evaluated consistently. But given the scale of the public health threat involved, countries would be wise to experiment with a combination of them.
For the push against unhealthy sugar consumption to be most effective, China -- where nearly half of all kids drink sugary beverages regularly and half of the population is either diabetic or pre-diabetic -- will need to join in. And regulators in every country will need to be careful not to discriminate among brands: To target the fizzy beverages made by the likes of Coca-Cola and Pepsi risks ignoring locally made packaged juices, which can be just as unhealthy.
Soft-drink companies warn darkly that new taxes will force them to pull back from emerging markets, putting jobs at risk. Asian governments should keep in mind the much larger costs they'll face -- in chronic disease, lost productivity and mortality -- if they fail to keep sugar consumption under control.
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