If sugar is the new tobacco, move fast

Jamie Oliver’s call for a tax on sweetened drinks is just one of a growing number of broadsides in the war on sugar.

Several countries - including Finland, France and Hungary - already have some form of sugar tax, and notably Mexico imposes a 10% per litre ‘soda tax’. It seems inevitable that the rest of the world will eventually follow suit. But if the lesson of tobacco is anything to go by, taxation could be the thin end of the wedge.

There are already restrictions on the types of products that can be advertised on kids’ TV. We could see existing advertising restrictions extended to include all adverts, promotions, packaging and discounts. Health warnings on packaging could become compulsory and certain outlets may even be banned from selling high-sugar products.

In a bid to get on the front foot, Tesco has already removed certain high sugar content kids’ drinks from its shelves, and Lidl has banned the sale of chocolate and sweets from checkouts. Asda, Co-op, Waitrose, Sainsbury’s and Morrisons are all cutting sugar content in their own-label drinks. Furthermore, current life sciences minister George Freeman is the first in his position to back a sugar tax. However, these gestures, despite being well intentioned, may not go far enough.

The World Health Organization’s Framework Convention on Tobacco Control, binding in 180 countries, demonstrates the effectiveness of a global healthcare coalition. Having made smoking a social and health taboo in many countries, a number of governments, regulators and NGOs are now turning their attention to sugar. It took many years for anti-tobacco legislation to develop but, with a successful blueprint, the battle against sugar may move far more swiftly. So it is essential that food retailers and manufacturers start to consider different scenarios and how they will respond. In the short term, this could involve tactical measures involving product portfolios, labelling, promotions and ingredients. In the longer term, it will involve increased strategic planning, while demonstrating they are working in the best interests of consumer groups and other campaigners.

However, with the direction of travel well signposted, food manufacturers and retailers would be well advised to develop their own regulatory strategy, engage with key stakeholders at both NGO, trade bloc and national level, and ensure this engagement is supported with robust, evidence-based analysis. This will not necessarily stop taxes and regulations being passed, but being proactive will ensure regulations don’t damage businesses unduly and may even provide early adopters with competitive advantage in a low-sugar world.

Liz Claydon is UK head of consumer markets at KPMG