South Africa Beverage Association Calls for Sugar Reduction Regulation Not Tax

02 Feb 2017 --- The Beverage Association of South Africa (BevSA) has been strongly opposed to the planned 20% tax on sugary sweetened drinks ever since it was first mooted - but now the body has outlined its criticisms in Parliament.

At a joint sitting in Parliament of the Standing Committee on Finance and the Portfolio Committee on Health, BevSA claimed the proposed levy will harm the industry and the country’s economic growth prospects, and dismissed the apparent health benefits such taxes bring about.

It also formally proposed a well-researched alternative to a tax, offering South Africans a greater contribution to reducing obesity than a tax without the job losses and economic harm that a tax would cause.

BevSa is calling for comprehensive local research before any tax implementation, like a total dietary intake study that would figure what is driving the country’s rising obesity, as well as a detailed socio-economic impact assessment on the effects of the tax.  
It does not believe the planned 205 tax is the best solution to public health care issues, claiming there are other much more effective ways to deal with the problem such as portion control, reformulation, increasing availability of low-calorie alternatives and price promotions. 

Since last summer BevSA has been warning that ten of thousands of jobs could be on the line if the tax goes ahead and numerous capital investment projects in various sectors of the economy would be put on hold. 

In August 2016, FoodIngredientsFirst reported how BevSA set its stall against the tax. 

BevSA said while the tax was announced as a 20% tax levied on all beverages, determined per gram of sugar, the average weighted rate of the tax would be around 25% and in some categories, such as cordials, would be far higher – in the region of 50%. 

Beverage companies urged government to consider a creating a regulatory environment which struck a balance by supporting growth, while promoting health outcomes.  BevSA proposed regulating sugar reduction instead of introducing a sugar tax, with the industry willing to commit to achieving double the calorie reduction envisaged by a tax, without adverse economic effects and job losses.

By using reformulation and promoting light and zero-sugar options, the industry said it could reduce calorie consumption by 14-18 kCalories per person per day.  This 14% reduction in daily calorie intake is two to five times what the proposed tax on sugar sweetened beverages would achieve.  This would result in a decrease of the prevalence of obesity by between 425,000 and 540,000 South Africans, claims BevSA. 

BevSA welcomed the opportunity to engage with Parliament and assures all stakeholders of the commitment of the industry to work with Government to contribute to the reduction of obesity rates in SA.