Mexico and Hungary tried junk food taxes - and they seem to be working

Walk into any food-selling establishment in the US, and it becomes clear very quickly why America is one of the most obese nations on the planet.

From morning muffins that pack as much sugar as an icing-topped cupcake, to chocolate bars that contain more than 600 calories, it’s extremely easy to overindulge in America.

What’s less clear is exactly what to do about that. Some kind of government intervention in the food environment probably has to be part of the solution. Taxes have been an effective, though still controversial, approach to curbing the consumption of tobacco, alcohol, and soda.

Now researchers from New York University and Tufts writing in the American Journal of Public Health are making the case for shifting food prices in ways that steer consumers toward healthier diet choices.

More specifically, they argue, a junk food tax — on “non-essential” foods like candy, soda, and potato chips — should be the next frontier in public health.

According to their review of the scientific literature on junk food tax bills and laws, a federal tax on unhealthy foods would be both legally and administratively feasible in the US. Instead of a sales tax that would show up at the point of purchase, the researchers argue for an excise tax on junk food manufacturers. That should increase the shelf price of junk foods and beverages, and deter consumers from bringing unhealthy food choices to the checkout counter in the first place.

Even if a federal junk food tax is legally feasible, however, that doesn’t mean it’s likely to happen here. In our current political landscape, it’s hard to imagine the researchers’ proposal going anywhere soon. (The Trump White House doesn’t even think obesity is an important issue, and the administration has been moving to deregulate industry.)

But as soda taxes gain wider acceptance, we’re bound to start hearing more and more about junk food taxes. Here’s what you need to know about them.

Only Hungary and Mexico have junk food taxes so far

Health researchers and officials have long contemplated junk food taxes, but have focused most of their energy on soda taxes to date. Sugary drinks were a natural starting place to experiment with government intervention in the food environment since there’s a lot of evidence linking sugary beverages to diet-related disease, and soda is an easily modifiable part of the diet.

Since 2013, eight municipalities and cities in the US have put in place measures to tax soda with the goal of curbing sugary-drinks consumption.

But the authors of the new paper say it’s time to start looking beyond soda taxes. “It’s important to have a conversation about the total diet, and not just eliminating sugary beverages,” said Jennifer Pomeranz, a public health lawyer at New York University and lead author on the paper.

Some countries have already been moving in that direction, imposing taxes that not only change the price of soda but other unhealthy foods, too.

In 2011, Hungary put a 4-cent tax on packaged foods and drinks that contain high levels of sugar and salt in certain product categories, including soft drinks, candy, salty snacks, condiments, and fruit jams.

In 2013, Mexico passed an 8 percent tax on foods including snacks, sweets, nut butters, cereal-based prepared products — all “non-essential” foods. Within these categories, foods that surpass a calorie density threshold (more than 275 calories per 100 grams) are taxed.

These countries decided to tax junk food because it’s become such a prominent component of people’s diets — and budgets.

“We may spend 5 to 7 percent of our food budget on sugary beverages,” said University of North Carolina nutrition policy researcher Barry Popkin, who was not involved with the new paper, “but we spend another 15 to 20 percent on junk food. If you take a country like the US, 75 percent of adolescents get more than half their calories from junk food.”

That’s why, as Popkin put it, junk food taxes “are the next target, globally.”

Junk food taxes seem to curb junk food consumption among the people who eat more of it

Researchers who have studied the impact of junk food taxes found they’ve changed people’s eating habits for the better.

In a recent evaluation of the Mexico junk food tax, people bought 7 percent less junk food than they would have if the tax hadn’t been imposed. That effect was even stronger than the 5 percent dent the tax made in the first year it was imposed. The researchers came to these conclusions by using buying patterns before the tax was imposed to predict future purchases, then compared that prediction to what was happening in Mexico.

The World Health Organization has looked at the Hungary tax, and found that junk food consumption decreased both because of the price increase and also the educational campaigns around the tax — an effect also seen with soda taxes. “Consumers of unhealthy food products responded to the tax by choosing a cheaper, often healthier product (7 to 16 percent of those surveyed), consumed less of the unhealthy product (5 to 16 percent), changed to another brand of the product (5 to 11 percent) or substituted some other food (often a healthier alternative).”

In the new paper this week, the researchers found the Hungary model was the ideal since it considers the broader nutritional value of foods, not just calories (as Mexico is doing). That has also had an impact on junk food manufacturers in Hungary, causing about 40 percent of them to tweak recipes in ways that make them healthier.

“If you include some nutrition criteria in the tax — such as sugar, maybe sodium and trans fats — then you create an incentive for manufacturers to reformulate their products,” Pomeranz explained.

Revenue from from excise taxes can also be earmarked for places in the budget — like health. In its first four years in operation, the WHO reported, Hungary’s tax brought in 61.3 billion forints (or $219 million US) for public health spending.

Another key finding from the Mexico studies and Hungary studies was that the junk food tax seemed to have the greatest effect among low-income groups and people who were big consumers of junk food prior to the tax.

“We think people who consume a lot of junk or soda are the most responsive to these taxes,” said Lindsey Smith Taillie, a University of North Carolina nutrition epidemiologist who has been evaluating the Mexico junk food tax.

Since low-income people tend to consume the most junk food, and are also at the greatest risk of diet-related disease, “this suggests a junk food tax might be regressive on income and progressive on healthfulness of food purchases.” In other words, the taxes hit the poorest people the hardest, but in doing so, may also move them away from junk food, Smith Taillie explained.

It’s still too early to tell whether junk food taxes will curb obesity or diabetes. It’ll take years to understand that. But for now, through both increasing the price of the products and education campaigns around the taxes, junk food taxes appear to reduce consumption — a finding that echoes the research on soda taxes.

The politics of a junk food tax in the US are tricky

Even the most glowing studies on the impact of junk food taxes are unlikely to make these levies more politically palatable. The debate about junk food taxes — and soda taxes for that matter — is really a debate about what role the government should play in fighting obesity and improving the American diet. And not everyone thinks the government has a role to play here.

One of the most popular counters to unhealthy food taxes is the “nanny state” argument — that they infringe on people’s freedom of choice.

However, as health researchers have long pointed out, “the costs of obesity arising from individuals’ poor nutritional choices are borne by society as a whole through taxes, lost productivity, and an overburdened health care system.” Some junk foods are also engineered to have addictive properties, like tobacco or alcohol, so you can make the argument that the government should in fact use regulation to nudge people away from them.

For now, don’t expect a US junk food tax any time soon. The industry would vehemently oppose a junk food tax, as they did soda taxes, and so would some groups of consumers, said David Just, a Cornell professor who studies what drives consumer choices. “Look at where soda taxes have taken effect in the US, it’s instructive,” he added.

People in places like Berkeley, where the first soda tax passed in 2013, are very minimal consumers of soda. “I hesitate to imagine that [a junk food tax] is something that would be very popular outside of just a few cities that are already leaning in this direction,” Just said.

As for a federal tax, the prospect of the anti-regulation Trump administration and current Congress regulating the food industry also seems highly unlikely.

Junk food taxes alone won’t solve obesity

Even the advocates of junk food taxes don’t think they’re going to be a panacea. It’s not just the low cost that draws people to junk foods. The marketing heft of multinational corporations is behind the products, and they’re engineered to get people hooked.

People with higher levels of education — and perhaps more knowledge about health and nutrition — are likelier to choose healthier foods.

To make things more complicated, there’s a supply problem. Researchers have pointed out that if Americans actually followed the US dietary guidelines and started to eat the volume and variety of fruits and vegetables health officials recommend, we wouldn’t have nearly enough to meet consumer demand. As of 2013, potatoes and tomatoes made up half of the legumes and vegetables available in this country, according to the US Department of Agriculture. Junk food, on the other hand, is plentiful and cheap.

The USDA doesn’t subsidize leafy vegetable crops in the same way it supports crops like wheat, soy, and corn — two crops that make up a lot of the junk food that overwhelms the US diet. Vegetables are more expensive and labor intensive to produce, as the Washington Post’s Tamar Haspel has pointed out, which also increases their price.

Marc Bellemare, an economist at the University of Minnesota and critic of soda taxes, notes that Americans love convenience no matter the cost — and that drives many people’s food choices. “This is a culture articulated around the fact that things should be convenient.” Junk foods tend to be easier to consume than, say, fruits and vegetables.

So instead of focusing solely on making junk food more expensive, we need to also make healthier foods more convenient and affordable, and to educate people about them.

The government and researchers have been thinking about ways to do that — subsidizing fruits and vegetables for the poor, encouraging people to grow their own food, and running marketing campaigns that make healthy foods sexy.

“There’s a growing consensus that a single tax is not going to be enough to move the needle on health,” Lindsey Smith Taillie summed up. “We need a package of policy solutions: a soda tax, a junk food tax, front of package warning labels that make unhealthy products more visible, reducing unhealthy food advertising to people. A junk food tax would be one additional policy mechanism.”

Even if the authors of the new paper are only dreaming for now, “they are laying the groundwork for when a Congress that would be amenable to this idea comes in,” Cornell’s David Just said. A federal junk food tax may be a long shot in the current Congress, he added, “but I don’t think that’s a permanent state.” And maybe, as with soda taxes, some cities will start experimenting even sooner.

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