DISCRIMINATORY TAXES A FLAWED AND LAZY RESPONSE

MEDIA RELEASE
January 17, 2013

Amid calls for an inquiry into the possible taxation of soft drinks in attempt to counter obesity, the Australasian Association of Convenience Stores (AACS) has reinforced that a rational – not emotional – approach is the only way to promote improved health outcomes.

AACS Executive Director Jeff Rogut said there is no rational basis to suggest introducing taxes on certain products will result in improved health outcomes and reinforced the financial burden that emotionally charged legislative responses can place on businesses.

“We would encourage any inquiry to remain mindful of the fact that the only available evidence suggests that education, potentially in the form of wellness and awareness programs, is the most effective way to achieve improved health outcomes,” Mr Rogut said.

“We also encourage dialogue with retailers, manufacturers and consumers to see what practical ideas may be put forward rather than jumping to the last resort of taxes,” he said.

Some companies have already taken action and others continue to develop healthier alternatives. An example in the convenience industry is the recent release by 7-Eleven of the very popular ‘Slurpee’ with less than 1% sugar for those looking to reduce their sugar consumption.

“Discriminatory taxes simply don’t work. For instance in Denmark, the government recently announced its plans to scrap a fat tax it introduced just 12 months prior and cancel its plans to introduce a sugar tax,” Mr Rogut said.

“According to the Danish tax ministry, this was because of increased prices for consumers, increased administrative costs which created a bureaucratic nightmare for producers and retailers, as well as the fact it put Danish jobs at risk.

“All the while, Danes simply travelled across the border to make their purchases, demonstrating the shortcomings of kneejerk responses devised without any educational merit.

“Applying tax to certain items because those items have an emotional association to obesity in the minds of some groups is not only flawed, it’s short-sighted and lazy. It’s also too big an economic risk for the Australian Government to take in the context of the challenges already faced by retailers and manufacturers in this country,” Mr Rogut said.

Mr Rogut said that if introducing a tax on soft drinks is to be pursued, logic suggests it would have to encompass all sweetened drinks such as flavoured milk, iced teas, fruit smoothies and otherwise healthy juices.

“The economic ramifications for manufacturers, suppliers and retailers would be immense, yet the potential for such measures to achieve improved health outcomes is unknown,” Mr Rogut said.

Further information:
Jeff Rogut
Executive Director
Australasian Association of Convenience Stores
Ph: 0467 873 789

Media enquiries:
Stephen Naylor
Wise McBaron Communication
Ph: (02) 9279 4770