German researchers find “tiered sugar tax” for beverages would save billions and boost health

24 Nov 2023 --- Germany’s legislation on sugar-sweetened beverages (SSBs) is lagging behind that of countries like the UK and Mexico, which is having an adverse effect on public health and impact on cost, according to new research. Study findings reveal that a tiered sugar tax would influence brands and food innovators to decrease the sugar amount in SSBs.

“We found that a tax on SSBs targeted at industry, similar to the one implemented in the UK, could reduce sugar consumption, prevent or postpone 244,000 cases of type 2 diabetes and save €16 billion (USD$17.4 billion) in healthcare costs and productivity losses in Germany over the next 20 years,” Karl Emmert-Fees professor of public health and prevention at the Technical University of Munich, tells Food Ingredients First. 

The study published in the open-access journal PLOS Medicine draws on the WHO SSB taxation recommendations to reduce the global burden of non-communicable diseases.

“Our study provides evidence that introducing a tax on SSBs based on sugar content could improve population health in Germany and save costs. Multiple national and international stakeholders support the implementation of such a tax in Germany,” continues Emmert-Fees.

The study found that an SSB tax could prevent or postpone 244,000 cases of type 2 diabetes and save €16 billion (USD$17.4 billion).Tiered tax system
The researchers used modeling to predict the effects of a 20% tax on SSBs and a tiered tax similar to that implemented in the UK, the soft drinks levy that came into force in 2018. 

This way, they estimated changes in sugar consumption, weight, associated medical and societal costs and the risk of type 2 diabetes, heart disease and stroke from 2023 to 2043.

Discussing how the proposed tiered tax system differs from a flat 20% tax and why researchers believe the tiered approach would have a more significant impact, Emmert-Fees explains that: “Under a tiered tax on SSBs, the tax rate depends on the sugar content of these beverages.”

“This can be achieved linearly or with different thresholds and incentivizes producers to avoid the tax by reducing the sugar content in their products. A good example is the Soft Drinks Industry Levy enacted in the UK in 2018. Under a flat tax, prices likely increase as industry passes most of the tax through to the consumer, which has been observed in other countries.”

In the UK, research revealed that sugar intake fell by 10% in the year following the levy's introduction. 

Emmert-Fees further outlines that higher prices act as economic signals to consumers, likely leading to less purchasing and consumption of SSBs. “We believe that the tiered approach is more effective because our study results and those of others support this conclusion.” 

“The WHO and other organizations further recommend linking the magnitude of taxes on SSBs to their sugar content,” he adds. 

The researchers found that the SSB tax could substantially impact population health in Germany.Health outcomes 
Emmert-Fees states that his team analyzed the impacts of SSB taxation on obesity and subsequent type 2 diabetes, coronary heart disease and stroke. “These constitute the largest share of the German national burden of disease and place a heavy burden on national social security and healthcare systems.”

“In our study, we show that sugar consumption will decrease in all analyzed scenarios of SSB taxation, particularly in younger age groups, which consume the largest amount of these beverages.”

“The direct and indirect effect of consumption of added sugars on obesity and type 2 diabetes has been well established. Consuming one serving of an SSB increases the risk of developing type 2 diabetes by roughly 30%,” Emmert-Fees asserts.

“Overall, we found that the taxation of SSBs could substantially impact population health in Germany. Particularly, people who consume many of these beverages would benefit from the highest reduction in sugar intake.”

Another study conducted in the UK between 2014 and 2020 suggested that the levy may have prevented 5,000 cases of obesity in young girls.

A study published this year linked the levy to improved dental health among British children. 

Meanwhile, the EU is taking a different approach by investing in the reformulation of sugary drinks, which has delivered a 17.7% decrease in average amounts of added sugar from 2015 to 2022. 

By Milana Nikolova