The views expressed in this presentation are the views of the author and do not

necessarily reflect the views or policies of the Asian Development Bank Institute
(ADBI), the Asian Development Bank (ADB), its Board of Directors, or the
governments they represent. ADBI does not guarantee the accuracy of the data
included in this paper and accepts no responsibility for any consequences of their
Global Overview
use. Terminology used may not necessarily be consistent with ADB official terms.

Fiscal policies and

SSB taxes

ADB Obesity and Fiscal

Policy Training Workshop
Manila, Philippines 13 – 15
July, 2018

Dr Temo K Waqanivalu
Prevention of NCD
 Outline

 Obesity and tooth decay

 Changing dietary patterns

 WHO guidance on healthy diet

 Fiscal policies as part of a comprehensive package

 Walk the Talk

Health Transition
Prevalence of obesity in men and women

 In 2014, 39% of adults aged 18

years and older (38% of men
and 40% of women) were
overweight.

 The worldwide prevalence of

obesity nearly doubled
between 1980 and 2014.

 In 2014, 11% of men and 15%

of women worldwide were
obese.
 Overweight continues to increase

70%
60%
% of population

50% High-income countries

Upper Middle-income countries
40%
Lower middle-income countries
30% Low-income countries

20%
10%
0% Overweight (2008)
Source: WHO NCD Country Profiles (2010)
1980 2008
Infant and young child overweight trends (2008)
20

15

10

0
1990 1995 2000 2005 2010 2015

Low-income Lower-middle-income Upper-middle-income High-income

 11m to 124 m (1975-2016)

 Another 213m overweight, if not yet obese

 Almost 1 in 5 children are overweight or obese

 20% increase in last 5 years

 http://www.ncdrisc.org/obesity-population-bubble-ado.html
 Childhood Obesity

 Globally 5% 2000, 6.7 % 2010

overweight & obese

 An increasing problem with some

coexistence of micronutrient def.

 Increasing prevalence of Type 2 or

adult-onset diabetes in children (7yrs)

We’re possibly facing the first generation who would

die before their parents…. Int. Conference on Obesity
 WHO Global Nutrition and NCD Targets by 2025
(adult baseline 13%).

(baseline 6.7%)
(baseline 13%)
Tooth decay, Pain & Suffering
 Dental caries (tooth decay)

 Probably the most common chronic disease globally

 # 1 reason for children’s admission into hospital in some

countries

 SSBs are the leading cause of dental caries

 Ultra-processed food markets

Stuckler D, McKee M, Ebrahim S, Basu S (2012) Manufacturing Epidemics: The Role of Global Producers in Increased Consumption of
Unhealthy Commodities Including Processed Foods, Alcohol, and Tobacco. PLoS Med 9(6): e1001235. doi:10.1371/journal.pmed.1001235
Mexico: Increased spending on SSBs and refined carbohydrates replaces fruits
and vegetables and dairy products
(% change in household food expenditure between 1986 and 1998)

Fuente: Rivera J, Barquera S, Campirano F, Campos S, et al . Epidemiological and nutritional transition in (Mexico :
Rapid increase of noncommunicable chronic disease and obesity. Public Health Nutr 2002; 5 (1a): 113-122.
Total grams of sugar purchased per capita per day through
packaged food and soft drinks
 Sales of Soft Drinks in Philippines
Retail sales per person in litres from 2010 to 2020

120.00

100.00

80.00

By 2020 this is forecast to

60.00 be 279 12oz Servings (US)
per person per year

40.00

20.00

0.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Euromonitor International – Soft Drinks, 2015

 Sales of Soft Drinks in Malaysia
Retail sales per person in litres from 2010 to 2020

70.00

60.00

50.00

40.00
By 2020 this is forecast to
30.00
be 178 12oz Servings (US)
per person per year
20.00

10.00

0.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Source: Euromonitor International - Soft Drinks, 2015

 Healthy diet
 A healthy diet throughout the life-course helps prevent
malnutrition in all its forms as well as a range of
noncommunicable diseases (NCDs) and conditions.

 The exact make-up of a healthy, balanced diet will vary

depending on the individual needs (e.g. age, gender, lifestyle,
degree of physical activity).

 For adults a healthy diet contains fruits, vegetables, legumes,

nuts and whole grains and should be limited in free sugars,
salt, total fat, saturated fats and free of industrial trans-fats.

http://www.who.int/mediacentre/factsheets/fs394/en/
Guideline: Sugar intake for adults and children
Recommendations:

 WHO recommends a reduced intake of free sugars

throughout the life course (strong recommendation).

 In both adults and children, WHO recommends reducing the

intake of free sugars to less than 10% of total energy intake.

 WHO suggests a further reduction of the intake of free

sugars to below 5% of total energy intake (conditional
recommendation).

 Free sugars include monosaccharide and disaccharides

added to foods and beverages by the manufacturer, cook or
consumer, and sugars naturally present in honey, syrups,
fruit juices and fruit juice concentrates.

 Strong recommendations indicate that “the desirable effects

of adherence to the recommendation outweigh the
undesirable consequences”
 How much is 10% of total energy intake?

 In recent years many food and drink companies

have pushed the physical activity message,
sponsoring major sporting events.

 The association of ultraprocessed food and soft

drinks with sport and celebrity endorsement is
wrong and gives the wrong message,
particularly to children.

 A child eating a burger and chips, washed down

with a sugary drink, followed by a bar of
chocolate and crisps, would need to run half a
marathon to burn off the calories consumed.

Source: World Cancer Research Fund International. Curbing

(Source: Childhood Obesity Action Plan, www.actionon sugar.org)
global sugar consumption. Effective policy action to help promote
health diet & tackle obesity
Fiscal policies as part of a
comprehensive package
 Mandate for implementing
fiscal policies to promote healthy diet
 Global Action Plan on NCDs 2013-2020:
"As appropriate to national context, consider economic tools that are
justified by evidence, and may include taxes and subsidies, that create
incentives for behaviors associated with improved health outcomes, improve the
affordability and consumption of healthier food products and discourage the
consumption of less healthy options.”
 Comprehensive Implementation Plan on Maternal, Infant and Young Child
Nutrition:
Under Action 3: “Trade measures, taxes and subsidies are an important
means of guaranteeing access and enabling healthy dietary choices. They can be
powerful tools when associated with adequate information for consumers through
nutrition labelling and responsible food marketing, and with social marketing and
promotion of healthy diets and healthy lifestyles.”
 Mandate for implementing
fiscal policies to promote healthy diet
 Second International Conference on Nutrition (ICN2):
Member States adopted the Declaration and Framework for Action which called
governments and partners, to "identify opportunities to achieve global food and nutrition
targets, through trade and investment policies“

 WHO Commission on Ending Childhood Obesity (ECHO):

Recommends implementation of an effective tax on
sugar-sweetened beverages.
NCD “Good Buy”

Eliminate industrial trans-fats through .1

Good buys: Effective
legislating bans on their use in the food chain
interventions with cost
effectiveness analysis Reduce sugar consumption through effective .2
> I$ 100 per DALY taxation on sugar-sweetened beverages
averted in LMICs

Other recommended Promote and support exclusive breastfeeding .1

interventions from WHO for the first 6 months of life
guidance (cost effective Implement subsidies to increase the intake of .2
analysis not available)
fruits and vegetables
Replace trans-fats and saturated fats with .3
unsaturated fats through reformulation,
labelling, fiscal policies or agricultural
policies
Limiting portion and package size to reduce .4
energy intake and the risk of obesity
Implement nutrition education and .5
counselling in different settings
Implement nutrition labelling .6
Implement mass media campaign on healthy .7
diets
Fiscal policies are a key component of a
comprehensive policy package
 Rationale

From an economic perspective, why should we increase taxes on tobacco,

alcohol and food products vs. other products?
1. Economic justification: correct for market failures and negative externalities
– Harm imposed on society is not accounted for in the market price
– Market price doesn’t account for future consequences of current actions
2. Public health justification: increased taxes and prices effectively reduce
their use and their consequent health burden
– Increases in taxes that increase prices reduce consumption through increased
cessation, reduced initiation and reduces intensity by continuing users
3. Public finance justification: higher taxes are an efficient way to raise
revenues
– Because the demand for these products are price inelastic, increases in taxes will
result in increased revenues even as consumption declines
– Increased revenues can be used to improve health and development
 WHO Technical Report on Fiscal Policies
(Geneva, May 2015)
 Appropriately designed fiscal policies have considerable
potential for promoting healthier diets and improving weight
outcomes

 Taxes that raise the prices of sugar sweetened beverages

by 20 % or more could lead to more than proportional
reductions in SSB consumption and net reductions in caloric
intake

 Subsidies for fresh fruits and vegetables that reduce their

prices by 10 to 30 % are effective in increasing fruit and
vegetable consumption. The combination of such subsidies and
taxation has greater effect

 Taxation of other unhealthy foods and non-alcoholic beverages,

appears promising
 WHO Technical Report on Fiscal Policies
(Geneva, May 2015)
 Vulnerable populations (ie the poor, the
young) are most responsive to changes in
the relative prices of healthier and less
healthy foods and beverages.

 Specific excise are likely to be most

effective but needs to be regularly adjusted
with inflation.

 Earmarking of tax revenue is challenging in

some countries but dedicating the revenues
for targeted health programs aligns with
its health objective and can be used to
strengthen capacity for tax administration
(i.e. for monitoring and enforcement).
 From 30 – 45 countries since 2016
Country Introduced Target Type of tax Rate of tax (US$) Latvia 2014 Non-alcoholic Specific US$ 0.086 /L
Ireland 19751992 Soft drinks Specific US$ 0.73/litre beverages with excise
excise added sugars or
Norway 1981 Sugar, chocolate, Specific US$ 0.40/litre for sugary sweeteners
sugary drinks excise drinks USA 2015 Sugar-sweetened Specific US$ 0.34/litre
Samoa 1984 Non-alcoholic Specific US$ 0.17/litre Berkeley beverages excise
beverages with excise (California)
added sugars or Barbados 2015 Carbonated soft Ad valorem 10% tax levied on value of
sweeteners drinks, juices with excise product before VAT
French Polynesia 2002 Sweetened drinks, Specific US$ 0.44/litre for imported added sugars and
confectionery, ice excise drinks sugar-sweetened
cream sports and energy
Finland 2011 Soft drinks, ice cream, Specific US$ 0.26/litre of soft drinks drinks.
confectionery excise with more than 0.5% of Chile 2015 Non-alcoholic Ad valorem 18% tax levied on value of
sugar beverages with excise product, if less than 6.25g
US$ 1.13/kg of added sugars of sugar per 100ml, 10%
confectionery and ice Dominica 2015 Non-alcoholic Ad valorem 10% excise tax,
cream beverages with excise except soft drinks (sodas):
Annual increases added sugars or Specific US$ 0.07/litre
Hungary 2011 Sugary drinks, foods Specific US$ 0.05 per item sweeteners excise
high in sugar, salt and excise US$ 0.03/litre of soft drinks Vanuatu Feb 2015 Non-alcoholic Specific US$0.47/litre
fat US$ 0.76/litre of beverages with excise
concentrates/syrups added sugars or
US$ 0.97/kg of salty snacks sweeteners
US$ 1.93/kg of jams 100% fruit juice taxed
US$ 0.50 per item for pre lower
packaged sugary products Ecuador 2016 Non-alcoholic Ad valorem 10% ad valorem excise tax
Denmark 2011-2013 Foods with over 2.3% Specific US$ 2.84/kg of saturated beverages excise SSBs with 25 grams of
saturated fat: meat, excise fat Juices < 50% fruit Specific sugar or less per litre and a
dairy, animal fats, oils content excise specific excise tax of 0,18
France 2011 Non-alcoholic Specific US$ 0.77/litre USD per 100 g
beverages with excise US$ 1.19/litre for energy Fiji 2016 Non-alcoholic Specific US $0.15/litre on locally
added sugars or drinks beverages with excise produced sweetened
sweeteners Indexed to inflation added sugars or Ad valorem beverages and 15% on
Mauritius 2013 Soft drinks, including Specific US$ 0.0009/g of sugar sweeteners excise imported beverages
juices and milk-based excise
beverages. Brunei 2017 Non-alcoholic Specific US$0,28/litre on SSBs with
Tonga 2013 Non-alcoholic Specific US$ 0.50/litre of soft drinks beverages with excise > 6 gram/ 100 ml
beverages with excise US$ 1/kg of animal fat added sugars or
added sugars or products sweeteners
sweeteners Saudi Arabia 2017 Energy drinks, soft Ad valorem 100 percent excise tax on
Animal fat products drinks excise energy drinks, and 50
(e.g. lard) percent tax on soft drinks
Spain (Cataluña) 2017 Soft drinks, flavoured Specific Specific excise tax
Cook Islands 2014 Non-alcoholic Specific US$ 6.78/kg of sugar in water, chocolate excise increases the price of
beverages with excise sugar-sweetened drinks, sports drinks, drinks with 5–8g of sugar
added sugars beverages cold tea and coffee for every 100ml by 0.08
drinks, energy drinks, euros per litre and the
Kiribati 2014 Non-alcoholic Ad valorem 40% fruit nectar drinks, price of drinks with >8g of
beverages that excise vegetable drinks, and sugar for every 100ml by
contain added sugar 0.12 euros
 WHO Implementation Guide on Food Taxes

Situation Analysis

Evidence gathering
Policy Development
(finance, health, Implementation
industry) Design: What
products Monitoring &
Tax environment – Nutrient Profile Evaluation
learn from Tobacco included/exempt,
type of tax Purchasing/
Policy Rationale measure Need systems in place
consumption to support and FUND
and Objective
Industry challenges Administrative longitudinal evaluation
Consider Broader challenges vs. of the impact of fiscal
strategies Public awareness, price strategies on:
education and simplicity
(marketing) Purchasing/consumptio
support incl Health Systems for n, revenues, proximal
Key policy political monitoring revenue health outcomes,
champions – but also longer-term health
consumption outcomes (e.g.,
advocacy obesity)
behaviour
 Challenges and considerations
 Experienced opposition from food and beverage
industries raising a variety of arguments that:
– question the effectiveness of taxation
– highlight concerns about the regressivity of consumption taxes
– create negative economic consequences (i.e. job losses, increased inflation,
harm to small businesses, tax avoidance and evasion)
– in some cases, threaten to move their production facilities to other
jurisdictions

 Governments have options for directly addressing

them, for example:
– subsidies to low-income consumers to offset concerns about regressivity,
– crop subsidization programmes to help move farmers (i.e. sugar cane
producers) to alternative sustainable livelihoods
– enhanced enforcement efforts to curb tax evasion

 The role of civil society, health professionals and

advocacy is critical.
 Challenges and considerations (continued)
 Lack of standards or criteria for determining exactly what to tax is
a challenge experienced by the countries.
– Development of a nutrient profile model is, therefore, considered an important
action

 Lack of capacities in countries to implement, monitor and enforce

 Formal evaluations are lacking in many countries.

– Monitoring and evaluation efforts are critical in documenting the effectiveness of
the taxes in terms of revenues, purchase patterns, consumption, product composition
for targeted products and close substitutes, and health outcomes.

 Policy coherence is needed to ensure maximum impact, e.g.

warning labels on taxed products and limiting marketing of taxed
products.
Alcohol
Sale
 WTT: Sugary drinks Free WHO
 As of 11 October 2016 no more sugary drinks sold at WHO HQ
– Translating the science into practise
– A leadership issue – WHO embodying its own advise
– Image issue – to member states and others
– Positive example for Member States, Regional Offices and Country
Offices

 Process
– WTT launched in January
– Memo initiated in April 2016 (WHD) and piloted
– Accompanied staff survey and consultation also with building services
– Injection of MS experience August 2016
– Final Policy Decision in September 2016
– Implementation by October 2016
 Thank You
waqanivalut@who.int

“Not one single country has managed to turn

around its obesity epidemic. This is not a failure
of individual will-power. This is a failure of
political will to take on big business”.