A 20 per cent sugar tax could discourage shoppers from buying unhealthier breakfast cereals, research involving health economists at York has shown.
And if shoppers are told about the amount of tax they are paying it gives them an extra ‘nudge’ towards healthier alternatives.
Shopping habits
The research studied the shopping habits of 1,000 people across the UK who were each given a budget of £10 to spend on soft drinks and cereals. They were asked to choose products from a purpose-built online website designed to resemble major supermarket sites.
The researchers wanted to compare the effect of a 20 per cent and 40 per cent tax on unhealthier cereals and soft drinks. They also wanted to know if telling people the products were being taxed made a difference to their cereal and drink choices.
They found that a 20 per cent tax was enough to influence spending decisions, especially if shoppers knew how much tax they were paying.
The research showed:
- A 40 per cent tax reduced the purchase of both unhealthier cereals and sugary soft drinks
- A 20 per cent tax significantly reduced the sale of cereals, but not of the sweetened drinks
- If shoppers knew they were being taxed by 20 per cent, purchases of both sets of products fell by around half.
“Our research shows that a tax on sugary drinks and unhealthier breakfast cereals could influence consumer behaviour,” said Professor Marc Suhrcke from our Centre for Health Economics. “It also shows the benefit of telling shoppers how much tax they are paying – this seems to act as an additional ‘nudge’ away from some of the unhealthier choices we offered them.”
The research was carried out in close collaboration with experts from Newcastle University, who led the work, and Anglia Ruskin University.
Supermarket website
Shoppers were asked to complete ten tasks on the modified supermarket website. Five of the tasks were to buy cereals and the other five were to buy sugar sweetened drinks. The shoppers could also choose not to buy.
Soft drinks are to be taxed by the UK Government from 2018 in a bid to tackle obesity and rising levels of diabetes. The tax, announced in the March 2016 Budget, means that drinks companies will be taxed according to the amount of sugar in the products they produce or import.
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