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The impact of a tax on added sugar and salt

Author

Listed:
  • Rachel Griffith

    (Institute for Fiscal Studies and University of Manchester)

  • Victoria Jenneson

    (Institute for Fiscal Studies)

  • Joseph James

    (Institute for Fiscal Studies)

  • Anna Taylor

    (Institute for Fiscal Studies)

Abstract

Sugary drinks taxes have been implemented around the world and governments around the world are considering extending these taxes to address concerns about rising obesity. We demonstrate the range of impacts a tax on added sugar and salt could have on purchases of food at home and out of the home in the UK. The impact will depend on how ?rms and consumers respond. There is considerable uncertainty about each of these. Therefore we take a very robust approach and consider scenarios that cover the full range of realistic possible levels of response – from very responsive ?rms and consumers to non-responsive ?rms and consumers, and everything in between. Fully responsive ?rms would reformulate products to reduce sugar and salt (we assume the maximum reformulation would be to targets set by Public Health England, PHE). Fully responsive consumers would substitute away from products in proportion to the increase in price, and not increase purchases of added sugar or salt on other products. In the remainder of this paper we describe the data in more detail (section 2), show the impact of taxes on prices (section 3), the impact on sugar and salt purchases (section 4), including by age, and show the implied health bene?ts from the Department of Health and Social Care calorie model and analysis by researchers at the The London School of Hygiene and Tropical Medicine (LSHTM) (section 5). Appendices show details on PHE reformulation targets (Appendix A), the results using the larger sample of data on home purchases (Appendix B), and we describe the methods and calculations used (Appendix C) .

Suggested Citation

  • Rachel Griffith & Victoria Jenneson & Joseph James & Anna Taylor, 2021. "The impact of a tax on added sugar and salt," IFS Working Papers W21/21, Institute for Fiscal Studies.
    • Handle: RePEc:ifs:ifsewp:21/21
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    References listed on IDEAS

    as
    1. Pierre Dubois & Rachel Griffith & Martin O'Connell, 2020. "How Well Targeted Are Soda Taxes?," American Economic Review, American Economic Association, vol. 110(11), pages 3661-3704, November.
    2. Guy E.J. Faulkner & Paul Grootendorst & Van Hai Nguyen & Tatiana Andreyeva & Kelly Arbour-Nicitopoulos & Chris Auld & Sean B. Cash & John Cawley & Peter Donnelly & Adam Drewnowski & Laurette Dubé & R, 2011. "Economic Instruments for Obesity Prevention: Results of a Scoping Review and Modified Delphi Survey," Monash Economics Working Papers 31-11, Monash University, Department of Economics.
    3. Andreyeva, T. & Long, M.W. & Brownell, K.D., 2010. "The impact of food prices on consumption: A systematic review of research on the price elasticity of demand for food," American Journal of Public Health, American Public Health Association, vol. 100(2), pages 216-222.
    4. Harding, Matthew & Lovenheim, Michael, 2017. "The effect of prices on nutrition: Comparing the impact of product- and nutrient-specific taxes," Journal of Health Economics, Elsevier, vol. 53(C), pages 53-71.
    5. María Eugenia Bonilla-Chacín & Roberto Iglesias & Agustina Suaya & Claudia Trezza & Claudia Macías, 2016. "Learning from the Mexican Experience with Taxes on Sugar-Sweetened Beverages and Energy-Dense Foods of Low Nutrition," Health, Nutrition and Population (HNP) Knowledge Briefs 106654, The World Bank.
    6. Rachel Griffith & Martin O’Connell & Kate Smith, 2018. "Corrective Taxation and Internalities from Food Consumption," CESifo Economic Studies, CESifo Group, vol. 64(1), pages 1-14.
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