Mr. Chris Macey:

I will be discussing fiscal measures to reduce overweightedness and obesity. We also developed a joint submission on tobacco control with the Irish Cancer Society and fully endorse the points it will make today.

Members of the committee are well aware of the facts behind Ireland’s obesity crisis. One in four three year olds, one in four primary school children, one in five teenagers and 61% of adults are obese or overweight, and these rates are rising. Despite this, the State continues to fail in its duty of care, particularly to protect the health of children from a multinational processed food and beverage industry whose sole remit is to maximise profit for its shareholders and accepts no responsibility for the impact of its marketing tactics on public health.

We believe the resulting excessive consumption of energy dense processed foods and sugary drinks must be tackled through action on many fronts, including the following fiscal measures: taxation to increase sugar-sweetened drink prices by at least 20%; unhealthy foods and beverages currently subject to zero or reduced VAT to be charged at the standard rate of 23%; and a regulatory impact assessment of healthy food subsidies and taxes on unhealthy foods.

Sugar-sweetened drinks are a key driver of our obesity epidemic. Although they have no nutritional value, they are packed full of calories. Children who consume these drinks receive around 20% of their recommended daily sugar intake from them. It is estimated that each extra glass consumed daily increases by 60% their risk of becoming obese. In addition, one in five one year olds, more than half of four year olds and 82% of 13 to 17 year olds consume a sugary drink daily. While the overall number consuming carbonated drinks has fallen since 2001, the daily intake has increased by more than one third among those who drink them.

A health impact assessment and modelling exercise by the Institute of Public Health and Oxford University for the Department of Health estimates that a 10% additional tax on sugar-sweetened drinks would reduce the number of obese adults by approximately 10,000. A 20% tax would have an even bigger health impact and generate extra tax receipts of around €60 million which could fund subsidies for healthy food and drinks and thereby counteract claims that such taxation would be regressive.

Industry groups claim taxation would not work, but in 1992, the removal of a special tax on soft drinks drove consumption up, suggesting the public is sensitive to their price. The industry also claims that taxation would cost jobs. However, reduced spending on sugar-sweetened drinks would result in higher expenditure in other areas and incentivise the industry to reformulate unhealthy products, thus being exempt from additional tax, opening up new markets and positively influencing public health. Research has shown the employment effects of a sugary drinks tax combined with a subsidy on fruit and vegetables would be neutral at worst.

Unhealthy food is generally subject to the standard 23% VAT rate, but products like croissants, banoffi pie, chocolate chip biscuits and jam doughnuts are charged at a reduced rate. Sugar, icing sugar, chocolate spread and pizza have a zero VAT rating. These anomalies make no sense whatsoever and we urge their removal.