Summary
Voluntary sugar reduction efforts have proved largely ineffective in reducing the use of sugar in food and drink products in the UK, with the DISL in contrast demonstrating how the ‘price’ of sugar can influence the product re-formulation efforts of companies. This suggests the UK’s future sugar trade policy should be managed in a way which carefully balances the supply and demand situation on the UK sugar market, so as to maintain sugar prices and prevent surplus supplies depressing sugar prices. Otherwise, the UK’s sugar trade policy could unnecessarily depress UK sugar prices, to the detriment of wider public health policy objectives.
The latest report of Public Health England (PHE) highlights the disappointing results of efforts to secure a voluntary reduction in sugar usage in food and drink products. In 2016 PHE set a target of reducing sugar used in the food and drink industry by 20% by 2020, in an effort to reduce levels of obesity in the UK. However, the UK food industry overall has ‘cut out only 3% of sugar from supermarket, cafe and restaurant products over the last three years.’
PHE points out how ‘while sugar content in breakfast cereals, yoghurts and fromage frais has come down by about 13% since 2015, there is “little or no reduction” in many other food categories’. The chocolate and sweets category in particular, has made little overall progress, with overall sugar usage having risen in this category by 16% and 7% respectively. This is a result of the increased sales on these products, while average sugar levels across the product range have not changed (1).
Only he application of Drinks Industry Sugar Levy (DISL) has been effective in reducing sugar usage in the products covered, with a 44% reduction having bene achieved since 2013. This is a result largely of corporate product reformulation efforts aimed at side stepping the sugar levy (1).
Overall PHE maintains ‘there has been hardly any change in the simple average sugar content from 24.6g per 100g at baseline (2017) to 24.5g per 100g in year 3 (2019).’ The overall results are causing alarm given the link between obesity and the seriousness of Covid-19 infections. PHE argues ‘faster and more robust action is needed to help us consume less sugar’ and reduce the economic burden of obesity and reduce unnecessary pressure on public health services. Prof Graham MacGregor, the chair of Action on Sugar, ‘called for mandatory sugar and calorie-reduction targets, pointing out that the sugar reduction in the last year alone was only 0.1%’. He argued that ‘apart from the sugary drinks levy, it’s abundantly clear that the government’s voluntary sugar reduction programme is simply not working’ (1).
On the basis of this experience it is increasingly being argued the 20% reduction target is unattainable without the introduction of similar sugar taxes for other products (1).
This being noted Prime Minister Johnson has repeatedly expressed his opposition to the wider use of sugar content taxes as part of a concerted push to address the growing obesity challenge in the UK. It remains to be seen whether his recent experience of Covid-19 infection will change his perception of the need for urgent action.
The UK Food and Drink Federation is ambiguous in its attitude to the PHEs sugar reduction strategy. The UK FDF claims the extension of voluntary reduction targets to milky drinks and smoothies has had some effect, reducing sugar usage in FDF products by 11% in just four years. It was argued voluntary targets are effective where they are realistic (2).
However, sections of the food and drink industry are unlikely to be supportive of a wider use of sugar taxes to incentivise reformulation, with the Institute for Economic Affairs being a cheerleader for these efforts to halt the spread of sugar taxes. Following the publication of the latest PHE review, the IEAs Head of Lifestyle Economics, trumpeted how the ‘sugar reduction scheme was always doomed to fail because it relies on companies making products that people don’t want to buy’. He argued, the 20% reduction target was a ‘Soviet-style diktat that takes no account of the realities of food manufacturing or consumer demand’. He welcomed the impending merging of Public Health England with other health bodies and expressed the hope ‘the food reformulation scheme should be buried with it” (3).
| Comment and Analysis The product reformulation efforts of drink companies in an effort to side-step the DISL, suggest prices paid for sugar are an important factor in product re-formulation processes. In this context, the impact of UK sugar sector trade policy choices could have an impact on sugar usage in food and drink products.If the UK government manages its sugar trade policy in ways which generated a surplus, this would be likely to cause UK sugar prices to fall, retarding efforts to discourage sugar usage in manufactured food and drink products. In contrast if the UK governments post Brexit sugar trade policy was managed in a way to ensure a balance of sugar supply and demand was maintained, this would support sugar prices, allowing targeted sugar levies to incentivise sugar use reduction in the food and drink sector.From a public health perspective this suggests a need for a strict management of the UK 260,000 tonne zero duty autonomous tariff quota for sugar. The aim of such a policy, from a public health perspective, would be to support sugar prices in ways which disincentivised the use of sugar in food and drink products. Such an approach to the UK’s autonomous sugar trade policy would serve to minimise the negative effects of changes in UK sugar trade policy on ACP sugar exporters. This needs to be seen in a context where in recent years ACP suppliers have accounted for 66% of total UK sugar imports from beyond the EU27 (see companion epamonitoring.net article, ‘UK Launches Consultation on its 260,000 Tonne Autonomous Tariff Quota for Raw Cane Sugar Imports’, 21 September 2020). There is however a debate over the impact of short-term sugar price developments on product reformulation processes. While in the early stages of the Covid-19 pandemic concerns were expressed over the impact of the sugar price collapse on reformulation efforts (see companion epamonitoring.net article, ‘Grim Sugar Market Prospects Will Require Better ACP Marketing to Exploit Available Evolving Opportunities’, 11 June 2020), analysts have pointed out how, with the two dominant sweeteners (aspartame and AceK) now being out of patent, ‘they have become commodity products cheaply made in China and elsewhere’. Against the background of this development, with these products now costing ‘5% or less’ of the price of sugar, it is argued ‘no real-world fall in sugar prices will make up the difference’ (4). With the product reformulation process being long and complex, this suggests the use of carefully designed sugar content taxes on a wider range of products, elaborated in light of the technical constraints faced by different products, would be an essential complement to a UK sugar trade policy which carefully manages imports to avoid sugar supply surpluses which would unnecessarily depress UK sugar prices, to the detriment of wider public health policy objectives . |
Sources
(1) Guardian, ‘Only 3% sugar cut out from food products in three years, PHE finds’, 7 October 2020
https://www.theguardian.com/society/2020/oct/07/only-3-sugar-cut-out-from-food-products-in-three-years-phe-finds
(2) Foodnavigator.com, ‘Sugar reduction scheme a ‘Soviet-style diktat’, 7 October 2020
https://www.foodnavigator.com/Article/2020/10/07/Sugar-reduction-scheme-a-Soviet-style-diktat/
(3) IEA, ‘Sugar reduction scheme a “Soviet-style diktat”’ 7 October 2020
https://iea.org.uk/media/sugar-reduction-scheme-a-soviet-style-diktat/
(4) Foodnavigator.com, ‘Could falling prices hinder sugar reformulation?’, 18 March 2020
https://www.foodnavigator.com/Article/2020/03/18/Could-falling-prices-hinder-sugar-reformulation