Is the sugar industry lying to us?

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Titled Is the Sugar Industry Lying to Us?, this episode critically examines the Health Promotion Levy (HPL) on sugary beverages, introduced to reduce sugar consumption and improve public health.

The panel of experts explores whether the sugar industry has been truthful about its claims concerning the levy’s impact on jobs and the economy, while urging viewers to consider the levy’s health benefits, particularly for vulnerable communities affected by obesity and diabetes.

Call to strengthen the Health Promotion Levy

The panellists are united in their call for the South African government to increase the levy to the originally proposed 20% and expand it to cover more sugary products. While the HPL has led to reductions in sugar consumption, it has not been adjusted for inflation, leading to a weakening of its impact over time.

Sue Goldstein, a public-health medicine specialist, and managing director of the SAMRC/Wits Centre for Health Economics and Decision Science (Priceless SA), stresses the need for stronger public-health policies, especially in light of rising obesity figures.

“It’s important to have intersectoral public-health policies like the HPL, which can prevent the conditions that make people more vulnerable to disease,” she notes.

Former chairperson of the standing committee on finance, Yunus Carrim, adds that civil society must continue pushing for policy changes: “We can’t afford to let the sugar industry’s influence block the expansion of the levy. It’s crucial that we prioritise the health of South Africans over corporate interests.”

Viewers are encouraged to join the movement and sign Heala's petition calling for the government to increase and expand the Health Promotion Levy. “We need the public to rally behind this. The sugar industry is thriving, but the health of millions of South Africans is at risk,” says Goldstein.

Origins of the Health Promotion Levy

The South African government first proposed a 20% sugar-sweetened beverage (SSB) tax in 2016. However, after extensive consultations with the beverage and sugar industries, the levy was reduced to approximately 10%, coming into effect in April 2018.

Despite this lower rate, studies up to April 2021 show that the HPL has led to significant reductions in SSB consumption, particularly among low-income groups and populations with high SSB intake. These findings suggest that the levy has been effective in improving health equity.

The impact of the HPL

Goldstein emphasises the importance of the levy in reducing unnecessary sugar consumption.

“The most important thing about the Health Promotion Levy is that what we are taxing is something that's completely unnecessary. There’s no nutritional value in sugary drinks,” says Goldstein.

She explains that despite the levy being set lower than initially proposed, research has shown a reduction in sugar consumption, particularly among vulnerable groups.

“The levy has been somewhat effective, but we need to increase it for it to reach its full potential. Given the rise in obesity and related diseases, strengthening the HPL is crucial,” adds Goldstein.

Carrim, who was deeply involved in the legislative process that introduced the levy, recalls the resistance from various stakeholders. “In 2016, we proposed a 20% tax on sugary drinks, but after extensive consultation with industry, the final levy was reduced to around 10%.

"Despite this compromise, the industry’s claims about massive job losses have always been exaggerated,” says Carrim. He urges civil society to take action: “It’s for the public to campaign, like Heala has done, to take to the streets and put pressure on the government to increase the levy.”

Michael Marchant, head of investigations at social justice organisation, Open Secrets, focuses on the corruption and misconduct within the sugar industry, using the Tongaat Hulett accounting scandal as an example.

“The systematic fraud by executives at Tongaat Hulett, with the connivance of auditors, has caused far more damage to jobs and livelihoods than the sugar tax ever could,” says Marchant.

“This scandal has hurt small-scale farmers and workers, but the industry still tries to portray itself as a protector of jobs. In reality, their priority is shareholder profit, not the wellbeing of their workers.”