Sugar-Sweetened Beverage Tax in Pacific Island Countries and Territories: a Discussion Paper
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© SPC, 2015 – Cover design and photo: Muriel Borderie –SPC Publications Section Muriel –SPC Publications and photo: Borderie design © SPC, 2015 – Cover Sugar-sweetened beverage tax in Pacific Island countries and territories: CONTACT DETAILS Secretariat of the Pacific Community SPC Headquarters SPC Suva Regional Office SPC Pohnpei Regional Office SPC Solomon Islands BP D5, Private Mail Bag, PO Box Q, Country Office 98848 Noumea Cedex, Suva, Kolonia, Pohnpei, 96941 FM, PO Box 1468 A discussion paper New Caledonia Fiji Islands, Federated States of Honiara, Solomon Islands Telephone: +687 26 20 00 Telephone: +679 337 0733 Micronesia Telephone: + 677 25543 Fax: +687 26 38 18 Fax: +679 377 0021 Telephone: +691 3207 523 +677 25574 Fax: +691 3202 725 Fax: +677 25547 Email: [email protected] Website: www.spc.int Sugar-sweetened beverage tax in Pacific Island countries and territories: A discussion paper Prepared by Andrea McDonald for the Public Health Division, Secretariat of the Pacific Community © Copyright Secretariat of the Pacific Community, 2015 All rights for commercial / for profit reproduction or translation, in any form, reserved. SPC authorises the partial reproduction or translation of this material for scientific, educational or research purposes, provided that SPC and the source document are properly acknowledged. Permission to reproduce the document and/or translate in whole, in any form, whether for commercial / for profit or non-profit purposes, must be requested in writing. Original SPC artwork may not be altered or separately published without permission. Original text: English Secretariat of the Pacific Community Cataloguing-in-publication data McDonald, Andrea Sugar-sweetened beverage tax in Pacific Island Countries and Territories: a discussion paper / prepared by Andrea McDonald 1. Beverages — Sugar content — Oceania. 2. Beverage industry — Oceania. 3. Beverages — Taxation — Oceania. 4. Beverages — Taxation — Law and legislation — Oceania. 5. Carbonated beverages — Taxation — Oceania. 6. Soft drinks — Taxation — Oceania. 7. Chronic diseases — Prevention — Oceania. I. McDonald, Andrea II. Title III. Secretariat of the Pacific Community 613.20995 AACR2 ISBN: 978-982-00-0907-3 Design and layout: Muriel Borderie – SPC Publications Section Photos: SPC staff Prepared for publication and printed at the Secretariat of the Pacific Community, Noumea, New Caledonia, 2015 ii Contents Executive summary ..........................................................................................1 1. Introduction ...............................................................................................5 1.1 Background .................................................................................................................................................5 1.2 Package of policy options .........................................................................................................................7 1.3 Aim ...............................................................................................................................................................9 2. Context and consumption ........................................................................10 2.1 Consumption ............................................................................................................................................10 2.2 Food environment ...................................................................................................................................18 2.3 Political environment .............................................................................................................................19 3. Sugary drink tax policies in the Pacific .....................................................21 3.1 Policy review .............................................................................................................................................21 3.2 Findings .....................................................................................................................................................22 4. Developing a sugary drink tax .................................................................26 4.1 Communicate a clear health goal ..........................................................................................................27 4.2 Characteristics .........................................................................................................................................28 4.3 Revenue and investment ........................................................................................................................37 4.4 Affordable alternatives ...........................................................................................................................39 4.5 Monitor the impact ..................................................................................................................................40 5. Debates and myths ................................................................................. 42 6. Summary of recommendations .................................................................45 7. Conclusion .............................................................................................. 46 Resources .......................................................................................................47 References ......................................................................................................48 Sugar-sweetened beverage tax in Pacific Island countries and territories: iii A discussion paper Figures and tables Figure 1: National indicators of soft drink consumption in Pacific Island Countries and Territories, 1995–2014. .......................................................................................................................................................14 Figure 2: Prevalence of overweight: percentage of adults with a BMI >25.0 in the Pacific Island Countries and Territories, 2002–2013 .................................................................................................... 17 Figure 3: Prevalence of adult diabetes, 2002–2011 ..................................................................................................18 Figure 4: Typical level of sugar-sweetened beverage tax (USD) on a 355 mL can of coke in Pacific Island Countries and Territories, over and above tax levels applied to other foods and drinks, 2014. ........................................................................................................................................... 25 Table 1: Summary assessment of policy options that aim to reduce SSB consumption. .............................8 Table 2: Mean household expenditure on beverages as a proportion of the household food budget (excluding alcohol and spending away from home) from Household Income and Expenditure Surveys 2000–2010, where beverage category data was available. .........................11 Table 3: Largest soft-drink exporters to Pacific Island Countries and Territories, by trade volume and value for Harmonised System 22.02 category, in 2013. ................................12 Table 4: Snapshot of soft drink and SSB consumption indicators in the Pacific region, 1995–2014. ......15 Table 5: Demographic and trade data for Pacific Island Countries and Territories relevant to addressing SSB taxation. .............................................................................................................................. 20 Table 6: Sugar-sweetened beverage taxation policies in Pacific Island countries and territories in 2014. .............................................................................................................................................................. 23 Table 7: Sugar-sweetened beverage taxes by level of SSB consumption in Pacific Island Countries and Territories, specifying the average level of SSB tax on a can of soft drink where tax has been adopted, 2014. ..................................................................................................................................... 25 Table 8: Comparison of possible types of excise tax on SSBs that could be used in the Pacific region 31 Table 9: Price elasticity estimates from meta-analyses of both empirical studies and simulation studies. ......................................................................................................................................... 36 Table 10: Estimated revenue in local currency expected from a 20% tax on soft drinks and a broader SSB tax adjusted for reduced demand and exclusion of expenditure on non-SSBs. 38 Table 11: Strengths and limitations of sugar-sweetened beverage consumption data in the Pacific region. ....................................................................................................................................................41 iv Executive summary Background A non-communicable disease (NCD) crisis in the Pacific has been widely acknowledged given that the region accounts for some of the highest rates of obesity and diabetes in the world. As well as the health impact, there are significant economic and financial implications for Pacific Island countries and territories (PICTs). The evidence of health damage from sugar-sweetened beverage (SSB) consumption is compelling.1 SSB consumption is known to cause dental disease, an increased risk of unhealthy weight gain, type 2 diabetes, metabolic syndrome, gout, and many other health conditions.