A Global Health Advocacy Incubator (GHAI) report has revealed that big soda companies are rigging sweetened beverage (SB) policies to protect increasing profits at the cost of public health and good governance.
The industry often opposes government policies against unhealthy sugar consumption with counterclaims of economic threats such as unemployment and loss of economic investments.
It also claims that taxes on sweetened beverages will prevent companies from contributing to the country’s economy, hunger relief, and development.
However, the advocacy group says these claims of dire economic consequences from SB taxes are false and clear strategies the industry employs to decrease public support for the policy.
It says these tactics also reinforce and support discourse on the unique role that private entities hold in maintaining and complementing the government’s efforts to develop the economy.
In Nigeria, the Manufacturers Association of Nigeria (MAN) warned the government that the proposed plan to increase sweetened beverage taxes would have negative economic repercussions.
It claimed that the tax and the inflation crisis would further erode the public’s purchasing power and cause mass layoffs, factory shutdowns, and higher unemployment rates.
Lorene Vara, senior advocacy advisor for industry firms at GHAI said advocates across the world need to understand these strategies, and critically analyse to see how the industry behaves to undermine healthy food policies.
“The first strategy is to propose weaker taxes. A trend we identify with the industry is that they understood that opposing directly the policy was not strategic. So, they started saying they wanted to contribute to the policy. To this end, they try to change the standards for SB tax. In other countries, especially Nigeria and Ghana, we are seeing how they are not only trying to intervene in the standards, but they are also trying to intervene in the nutritional guidelines,” Vara said during a webinar to launch the report.
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She further noted that these contributions affect the technical details of the tax structure.
Since the N10 per litre excise duty tax was introduced through the financial act of 2021, Oluwafemi Akinbode, executive director, Corporate Accountability and Public Participation Africa (CAPPA) said the industry has done everything to undermine and argued for its removal.
Akinbode said the industry has essentially deployed scaremongering to pressure the government to discontinue the tax that advocates believe is too low.
“A bottle of 55cl sweetened beverage that sold for N100 before sells for N400 today and that has significantly eroded the value of that tax. Despite this, big soda companies continue to say that tax will impoverish the poor,” Akinbode said.
In South Africa, opposition from the soda industry has tried to prevent passage of the sugary drinks tax and improvements in its design, the report shows.
The health promotion tax was implemented in 2018 to reduce obesity in South Africa.
However, the Beverage Association of South Africa claimed that the proposed measure would affect between 62,000 and 72,000 jobs, and 10,000 small businesses and potentially reduce the country’s Gross Domestic Product.
The report states that the industry’s objective has been to avoid increases in tax rates in recent years.
Despite civil society’s request to increase the tax on SBs to help reduce and prevent NCDs, the government refused and froze the tax level for two years following strong pressure from the industry.
Also, the Food and Beverage Association of Ghana has mounted pressure on the government to reduce taxes on the beverage industry to boost exports.
Arguments stated that high taxes hinder pricing competitiveness against foreign brands and suggested incentives for production and export.
To tackle this challenge GHAI says policymakers, advocates, and the public health community must work together to protect SB tax policies to effectively defend human health over private and economic interests.
The advocacy group has developed key recommendations in three critical categories: protecting the tax design to ensure optimal public health outcomes, safeguarding the policy decision-making process from undue influence, and leveraging opportunities for civil society to defend SB taxes.
In the tax design, Vara urged policymakers to go for robust taxes covering issues including beverages with non-sugar sweeteners.
She also noted that such policies must ensure that the design is oriented towards disincentivising the consumption of these products.
“In the decision-making process, make sure the industry does not influence and undermine high standards in tax design and cover arguments coming from the industry to self-regulate,” Vara Said
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