MOH report concludes sugar taxes don’t work

Eric Crampton has spent 50 days battling the Government to get a report the Ministry of Health commissioned from NZIER released. Thanks to the Ombudsman, it is now public.

Eric summarises their findings after reviewing 47 studies:

• Taxes do generally appear to be passed through to prices and some reduced demand is likely
• Estimates of reduced intake are often overstated due to methodological flaws and incomplete measurement
• Price elasticities from early studies with fundamental methodological flaws have later been used in a number of other studies to assess the impact of sugar taxes, resulting in significantly overestimated reductions in demand
• There is insufficient evidence to judge whether consumers are substituting other sources of sugar or calories in the face of taxes on sugar in drinks 
• Studies using sound methods report reductions in intake that are likely too small to generate health benefits and could easily be cancelled out by substitution of other sources of sugar or calories
• No study based on actual experience with sugar taxes has identified an impact on health outcomes
• Studies that report health improvements are modelling studies that have assumed a meaningful change in sugar intake with no compensatory substitution, rather than being based on observations of real behaviour.

The last two are the killers. No study has found any improvement in health based on actual data. The ones that claim health benefits are based on models, not actual people.

Note this report was not commissioned by any industry participant, but by the Ministry of Health.