AACS SLAMS ABSURD SOFT DRINK TAX SUGGESTIONS

June 17 2014
The Australasian Association of Convenience Stores (AACS) has slammed research released this week claiming a tax on sugared drinks would have a positive impact on the nation’s obesity issue. AACS CEO Jeff Rogut said there is no proof – either in Australia or internationally – that “sin taxes” result in improvement in health outcomes, yet the imposts on small business are severe.
“Sadly, research reports like that released by Monash University arguing that tax increases equate to improvements in health outcomes in society are consistently proven to be irrelevant in a real world context,” Mr Rogut said.
“Theorising that a 20 cent per litre tax on sugared drinks would help some people lose over three kilograms in weight represents an absurd leap in logic that fails in every way to consider the actual behaviour of consumers.
“What these types of lazy, money grabbing measures do achieve is adding another significant financial burden on those at the coal face – retailers and suppliers to the industry,” he said.
While recent studies in the United States and Germany have overwhelmingly rejected the notion of “sin taxes” on the basis that they simply don’t work, perhaps Denmark serves as the best example of how just how damaging this type of Government money grab can be.
The economic effects of the fat tax in Denmark were uniformly negative. It is estimated at least 10% of fat tax revenues were attributed to administrative costs and the tax was estimated to have cost 1,300 Danish jobs (The Proof of the Pudding: Denmark’s fat tax fiasco, Christopher Snowdon).
During its implementation, opinion polls showed that 80% of Danes did not change their shopping habits as a result of the tax and the main effect on shopping habits was to encourage people to visit Germany and Sweden where prices were lower. The Danish Government has since scrapped the tax.
Mr Rogut said international research pointing to the negative economic consequences of these taxes adds weight to the disastrous examples of ineffective and counterproductive taxes closer to home.
“If the researchers are in any way comparing an apparent reduction in smoking to tax increases, the fundamental premise is flawed. All tax increases and measures like plain packaging have succeeded in doing is driving consumers to buy cheaper tobacco products,” Mr Rogut said.
“One doesn’t have to be a mathematician to realise that applying a similar numerical formula to a potential sugar tax is not only irrelevant but silly.
“What’s next – plain packaging for soft drinks? Think of the disastrous economic consequences of such an absurd suggestion, not to mention the loss of many thousands of jobs.
“At some point Governments around the country must embrace the fact that education is the simplest, most effective and most ethical approach to improving health outcomes in society. Any measures which omit a focus on education can be dismissed as merely politicking and have proven to be ineffective,” Mr Rogut said.