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The National Food Strategy aims to help us “escape the Junk Food Cycle and Protect the NHS”. And one of the ways it proposes to do this is with a salt and sugar tax. But trying to ensure food “makes us well instead of sick” is an enormously demanding challenge. 

Ideally, we’d see a change towards healthier diets come naturally through choices in consumption and decisions in production but this clearly isn’t happening, hence the need for a radical rethink of what’s next. 

There are two main options for instigating change: trying to change the behaviours of consumers that allow them to make better choices or by direct intervention in markets via taxes to make some choices less appealing than others. 

Before exploring the tax option, let’s consider the changing behaviours route first. It’s well known governments use nudge theory in aims to influence behaviour without forcing people to do so. The ‘Five a Day’ campaign is one of the most well known examples, but there are many ways of nudging falling into three broad categories: cognitive changes, affective changes, and behavioural changes. So far these nudges haven’t necessarily led to the change policy makers are seeking and could be seen as only a partial solution. 

What about taxes then? If something is viewed as bad for us and over-consumed, one option is to raise its price through a tax to encourage us to reduce consumption and is the argument used for so-called ‘sin taxes’ on alcohol and tobacco. The NFS calls for a £3/kg tax on sugar and a £6/kg tax on salt. On the surface, they appear simple and direct – but we can’t be certain sin taxes directly lead to a reduction in salt and sugar consumption. 

There are many variables to consider with taxes, not least of which is income. Higher prices on food are generally regressive – poorer households spend a higher proportion of their income on food than richer households, so if prices rise such people are hit hardest. Also, governments are not keen to force food prices up as this has never been popular with the public, and given the current rising levels of costs of living, there would be a reluctance to introduce such a tax if the effect was more costly for consumers.

To avoid this hit on consumers, it is hoped that producers respond by reducing the salt and sugar content of their goods - a process known as reformulation. Reformulation is a better way of reducing sugar and salt consumption, as it directly reduces the volume of these ingredients in the final product. We know urging companies to do this through nudge methods doesn’t work as there is a disadvantage for any producer that is the first to make those changes. Costs will be incurred in changing recipes, while those who don’t reformulate continue to enjoy high sales. Reformulation, therefore, is best achieved through taxes that force all producers to react. 

Taxes like this aren’t new - the has been in place in the UK since 2018. Its announcement in 2016 saw 50 per cent of manufacturers reduce the sugar content of their drinks by the time the Levy came into effect. Whilst high sugar options remain on the shelf, the volume of lower sugar options consumed has increased since the tax. But it is a complex task to determine the exact outcomes of imposing these taxes as some companies and consumers respond more fully than others. 

A more beneficial solution would be to compound taxes with nudge changes known as ‘choice architecture’ such as positioning healthier products in ideal aisle positions in stores, greater promotion of healthier options or portion size reductions. Labelling can also make a difference. Recent interest has been in front-of-package labels which are designed to help steer better choices without consumers seeing price increases, but these are seen by food manufacturers as evaluative in nature – they label goods as unhealthy or act as a health warning, where some argue that it is not goods that are unhealthy per se but people’s diets overall that can be unhealthy. Getting everyone on the same page is not always straightforward. 

The NFS calls for taxes to help reduce salt and sugar consumption and draws on the experience of the SDIL to show how this can be productive, mainly through reformulation. The assumption here of course is that consumers will find such changes palatable and that they will then consume the ‘new recipe’ goods. If not, the taxes act to raise food prices which can be regressive in nature and affect poorer households more heavily. 

At the Institute for Sustainable Food, we support a combination of measures including taxes that incentivise the reformulation of unhealthy food so prices can be kept affordable for people on low incomes, plus the deployment of a range of other initiatives from high profile public health campaigns to the placing of products on supermarket shelves. Change is needed, and fast, but it can’t be done with a single solution alone.

Wyn Morgan is an economist and a founder member of the Institute for Sustainable Food. He served as Vice-President for Education at the University of ��«Ӱҵ from 2015 to 2020.