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Worldwide, millions of deaths every year can be attributed to poor nutrition, and these numbers are rising. These deaths are preventable, and one strategy to encourage consumers to make healthier choices is through fiscal policies such as subsidies or taxes. Examples include taxes on products known to be unhealthy, such as tobacco and alcohol, to discourage consumers from purchasing these products.

The World Health Organization (WHO) has hired a team of researchers from the University of California, Connecticut and the University of Chicago of Illinois to assess whether similar food policies affect health, in hopes of providing policymakers around the world with data on the results of these policies. . They recently published two articles in the Journal of the American Medical Association, one of which is about economic and health effects of food taxes and subsidiesand another dedicated results of taxation of sugar-sweetened beverages.

One problem the researchers have encountered is that food taxes are politically complex and difficult to implement, so there are few examples from which to draw data, says UConn Rudd Center for Food Policy and Health Director of Economic Initiatives and Lead Author Tatyana Andreeva. In addition, Andreeva explains that these questions are relatively new, and while there is a wealth of data on purchasing behavior, there is not much data on diet and health outcomes. As a starting point, the researchers focused on data on subsidies and taxes together to get a general idea of ​​how these policies might affect consumer behavior.

Tatyana Andreeva.
Tatyana Andreeva (UConn Rudd Center)

“When we talk about taxes on food, we mean a tax on unhealthy food,” says Andreeva, assistant professor of agricultural economics and resources at College of Agriculture, Health and Natural Resources. “An example is Mexico, which in 2014 introduced a tax on non-essential high-calorie foods as part of a national strategy to combat obesity. Denmark introduces tax on saturated fats was cancelledso we don’t have a lot of food taxes or policies to testify to the effectiveness of food taxes, but we do have a lot of sweetened beverage taxes (SSB) to explore.”

In terms of subsidies, the idea is that if prices are lowered and healthy food becomes more affordable, people will buy more. Andreeva says it’s easier to find subsidies for fruits and vegetables, and some countries also have subsidies for healthier foods and staples to support the nutrition of people on lower incomes.

“For example, subsidies have been widely used in the US to support nutrition, especially for participants in food assistance programs such as CLICK. One example is Double food bucks a program where SNAP members can buy vegetables at farmers’ markets, and for every dollar of SNAP benefits spent, the customer receives $2 of produce. It’s a pretty significant subsidy.”

In their recent research, the researchers conducted a meta-analysis in which they evaluated peer-reviewed studies published around the world to examine the impact of subsidies and taxes on purchases, prices, consumption, diet, and data on other available outcomes.

“We assessed how purchases of fruits and vegetables change in response to subsidies for fruits and vegetables, and estimated how much consumer demand will change when prices are reduced through subsidies,” says Andreeva.

The results showed a significant improvement in consumer purchases and demand for fruits and vegetables. In terms of taxes on SSB, sales are also down significantly. Both policies worked as expected; however, consumers did not respond as strongly to changes in fruit and vegetable prices as the researchers expected, Andreeva says.

Reportedly, Andreeva says they also haven’t seen much change in terms of the impact of subsidies on consumption.

“This may be due to the lack of sufficient research specifically focused on consumption.”

With millions of points of sales data, purchases are easier to analyze, but Andreeva says that consumption – whether purchases are consumed and what the health consequences of the consumer are – is much more difficult to measure, as it requires more expensive and time-consuming data collection. and follow-up; for example, through surveys and interviews. Andreeva notes that while these health-focused data are more intense, they are vital to understanding the health outcomes of these policies.

Plastic soda bottles on a white background.  (Drink, drink) January 20, 2021 (Sean Flynn/UConn Photo)
Taxes on sugar-sweetened beverages effectively reduce consumption (Sean Flynn/UConn Photo).

Successful examples of small sales taxes on snacks and sugar-sweetened beverages in various regions of the US and Mexico show that these taxes are promising ways to incentivize healthier decisions. The argument that items like SSB are optional makes it easier to tax them, Andreeva explains:

“There are no nutrients in these drinks. When it comes to food, any food you look at has some nutritional value, and it’s a lot harder to impose a tax. Also, beverage taxes are easier to implement because they target one industry, whereas if you tax snacks, you affect a much wider range of companies and you get more opposition from more industries.”

The need for specific definitions of what is considered healthy and what is not is illustrated by the example of Denmark with a tax on saturated fats. Andreeva explains that the measure was quickly rescinded due to objections raised by the tax’s impact on meat and dairy prices.

Higher taxes also generate more opposition, while lower taxes for example, the 6.35% sales tax on candy and soda in Connecticut, many people don’t know what they are paying.

Measures such as taxes and subsidies are just one of the possible strategies that can be implemented to help consumers make better choices. However, there are bigger systemic barriers to those trying to make healthier food choices, Andreeva says. Even if the prices are low, is there a grocery store nearby or transport to it? Are there farmers markets nearby? Do consumers have the knowledge, means or time to cook healthy food?

Although the data shows some increase in healthier food sales, the growth may not be as strong because of these additional barriers.

“The purpose of this study is largely to see the impact on health care costs or whether taxes or subsidies help reduce diabetes or obesity,” says Andreeva. “Are we seeing this reflected in healthcare spending? Unfortunately, we do not yet see this evidence, because we have not had enough time since the introduction of subsidies or taxes. One day we hope to see when the money is spent on subsidies, we may see savings elsewhere. Hopefully we can show politicians the health impact of raising taxes or providing subsidies.”

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