Proposed sugar and salt tax has the capacity to do more harm than intended good – RPG Founder Mark Lumsdon-Taylor comments on behalf of MHA MacIntyre Hudson.
Following the publication of an independent report on England’s National Food Strategy led by businessman Henry Dimbleby and endorsed by Jamie Oliver, the main recommendations of which were for a sugar and salt tax to be imposed, to combat obesity, Mark J Lumsdon-Taylor, senior corporate consultant at MHA, says the recommendations are a blunt instrument to a complex problem:
A sugar and salt tax to combat obesity may be a fine idea in principle but needs very careful forethought to ensure it does not go wrong. When imposing a tax intended to change behaviour you need to know who will end up paying it. It seems unlikely price rises will be passed onto consumers because of how competitive grocery retail is. This means if a sugar and salt tax is intended to directly change consumer behaviour it is likely to fail. These are primary ingredients in the food chain.
“The report’s authors are banking on the tax changing the behaviour of food producers. This did happen in part following the introduction of the soft drinks levy in 2018 when producers responded with a lot of recipe innovations. The trouble here is the recommendations look very draconian and are liable to drive manufacturers and producers out of business before actually driving reforms.
“For example, the price a large food processor is charged per kilo of sugar is 50 pence. The report proposes a £3 tax per kilo: a 600% price increase in direct costs. If this cost cannot be passed on, which we have good reason think it cannot be, businesses and sectors will vanish overnight, and the end result will be unemployment not reformed consumer habits.
“There are other major problems with the recommendations. Imported manufactured products may not be subject to the sugar and salt taxes, especially given the kind of free trade deals the UK is aiming to strike overseas. This means these products will still be cheap and available to the consumer.
“In short, while tackling obesity is a laudable goal, a sugar and salt probably can’t directly impact consumer behaviour but could force food processors under if not handled with great care.”
Mark Lumsdon-Taylor goes on to say: “Poor nutrition is overwhelmingly linked to poverty and I fully support Henry Dimbleby in his efforts to bring better nutrition to the most vulnerable families in our society. In comparison to other countries, the price of our domestic food is not expensive. However there will be little support to see food prices rise, irrespective of the sugar and salt content, among our competitive grocers. They are very sensitive to increasing the cost to consumers. This means that it is far more likely that rather than tax increases making the desired difference in consumption habits, there will be yet more cost pressure on the food producers and farmers who are already living on wafer thin margins. This is not what we need if we are to support British farming, protect the countryside and rural communities and become more sustainable as a nation.
“The increase in consumption of fresh vegetables (through NHS contracts) will be welcomed by the farming industry. This will be particularly beneficial if it is linked to domestic procurement, which is what we need to keep food standards high and our nation on the path to being sustainable. But what use is the food without the knowledge of how to use it and prepare healthy and nutritious meals? The National Food Strategy review fails to address the criticality of educating consumers about how and what to cook to keep themselves healthy. Without that missing ingredient, I sincerely doubt that consumers will change their habits significantly enough to make a difference.
“We need a whole industry approach where the Import / export angle is considered over a period of time, correctly legislated with top and bottom food value chain managed”.
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Is Food in the UK Expensive? Rural Policy Group and its panel of speakers question the notion of food poverty when food is so cheap, and look at how food prices are set.
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RELATED INFORMATION
The National Food Strategy. Read the full report and recommendations from the independent review led by Henry Dimbleby.