France will place a levy on added sugar soft drinks

France will place a levy on added sugar soft drinks

Pressure around the economic cost of obesity is growing, raising the spectre of how long governments, such as the Conservative-Liberal Coalition in the UK, will allow self-regulation to dominate policy.

There are increasing calls for a more hands-on approach to a problem that is starting to threaten government coffers, rather than simply the lifespan of individuals. Already this year, Denmark has introduced a tax on foods that contain more than 2.3% saturated fat. France, meanwhile, will in January implement a EUR0.02 levy per 33cl can of added sugar soft drinks.

In the age of austerity, which looks set to define the next decade of politics in Europe at least, governments may well take a closer look at what is eating their budgets. Diseases related to obesity are rising rapidly up the list, and even the western world's free market think-tank, the Organisation for Economic Co-operating and Development (OECD), thinks so. 

This week, the OECD said that more than half of the population in its member countries is either overweight or obese. In its 'Health at a Glance 2011' report, it questioned so-called 'sin taxes'; not in terms of their restrictive nature on business, but in terms of whether they go far enough.

"Countries have yet to prove that these policies are sufficient, especially among the poorest in society who are most at risk of obesity," the OECD said. "OECD work has shown that a comprehensive prevention strategy combining health promotion campaigns, government regulation and family doctor counselling would avoid hundreds of thousands of deaths from chronic diseases every year."

Such a holistic standpoint is natural, but talk of regulation is not entirely what one would expect from a free market think-tank. It adds to momentum begun by the United Nations General Assembly, which held a conference on non-communicable diseases in September. 

“These are the diseases that break the bank," said the director-general of the World Health Organisation, Dr Margaret Chan, at the conference. She cited a study by Harvard University estimating that, over the next 20 years, non-communicable diseases would cost the global economy more than $30tn, or 48% global gross domestic product (GDP) in 2010.

In the end, those arguing that prevention of such diseases is down to individual choice won the day, but only after some dirty laundry had been aired. "We should encourage individuals to make the smart choices that will protect their health," said UN secretary-general Ban Ki-moon, summarising the conference.         

If one takes an economic perspective, however, the question is how long will it remain viable to maintain a relatively hands-off approach to behavioural change and product formulation? No one has a precise answer, but pressure on self-regulatory initiatives is mounting.

In the UK, which has the sixth highest obesity rate among OECD nations, the Coalition Government's Responsibility Deals with the food, soft drinks and alcohol industries are under scrutiny. Earlier this month, the UK Parliament's Health Select Committee said that it is "unconvinced" that industry itself can encourage people to adopt healthier lifestyles. 

The Committee, which contains members from across the political spectrum, reported: "We do not oppose the exploration of innovative techniques such as nudging, where it can be shown, following proper evaluation, to be an effective way of delivering policy objectives.

"The Committee were, however, unconvinced that the new Responsibility Deal will be effective in resolving issues such as obesity and alcohol abuse and expect the Department of Health to set out clearly how progress will be monitored and tougher regulation applied if necessary."

Ideologically, the UK Conservative party, which dominates the Coalition Government, supports a small state with little regulation. Certainly in the UK, there is no indication that policy is moving away from a voluntary approach, championed by the previous administration and taken further by the Responsibility Deals. 

Where this line of thought potentially begins to unravel, though, is in the economic sphere. If the burden of lifestyle-related diseases continues to increase as expected, particularly against the backdrop of a tight economy, then so might political pressure to redraw the boundaries of individual choice; and so, too, self-regulation. Such a tipping point may not be that far away.