Fizzy drink tax shot down

Taxing fizzy drinks and high-fat foods, while subsidising fruit and vegetables, could make New Zealanders healthier.

But a Christchurch expert is disputing these claims made in a new report.

Canterbury University senior lecturer in economics Dr Eric Crampton said: "Taxes and subsidies to encourage healthy eating are notoriously difficult to administer in the real world. They're the kind of thing that sounds simple, but wind up being a bit of a compliance night-mare."

He said: "Why subsidise fresh vegetables while ignoring frozen or canned vegetables, which are just as nutritious and favoured by poorer cohorts?

"If minted peas count, where do we draw the line between a frozen vegetable and a processed food product?"

Researchers from Auckland University and Otago University (Wellington) reviewed a series of studies which investigated the association between food pricing strategies, food consumption and chronic diseases.

Their report, released on Wednesday, combines data from 32 countries.

They found increasing the price of soft drinks by 10 per cent could decrease consumption by between one and 24 per cent.

However, Dr Crampton said such price increases would not help reduce the amount of sugary foods people eat.

"The paper finds a ten per cent increase in the price of soft drinks via a soda tax would reduce soda consumption by 9.3 per cent, but would only reduce overall energy consumption by 0.2 per cent.

"People who want to consume sweet things shift away from taxed sweet things to less-taxed sweet things," he said.

When it came to subsidising fruit and vegetables, researchers found decreasing prices by 10 per cent could increase their consumption by between two and eight per cent.

However, they also found evidence to suggest that such a subsidy might result in what is called compensatory purchasing - people may buy less of other healthy products, such as fish, or more of less healthy products like sugar.

Such buying may not be beneficial to New Zealand's overall health, according to the report.

Dr Crampton said a previous study in America found the relative price of healthy food really does little to determine overall obesity rates.

He said the costs of food taxes would outweigh any potential health benefits.

"While we should not expect large health benefits from fat or sugar taxes, the administrative costs are real and substantial," he said.

The New Zealand report found evidence to suggest that food pricing strategies have the potential to reduce equalities within society.

The authors said studies that compared food pricing strategies by socio-economic group estimated improved health outcomes for those on lower incomes, which may be relatively greater than for those on higher incomes.