The tax has been described as \u201cmurderous\u201d<\/a> by the chairman of Coca-Cola Beverages Africa, Phil Gutsche.<\/p>\n The Beverages Association of South Africa<\/a>, a membership-based industry body representing the interests of non-alcoholic beverage manufacturers, claims that the tax is unnecessary and will have far reaching implications.<\/p>\n We fact-checked two of their claims contained in the\u00a0comment document they submitted to Treasury<\/a>.<\/p>\n What is the sugar tax?<\/strong><\/p>\n Sugar-sweetened drinks include soft drinks, sugar-sweetened fruit drinks, sports and energy drinks, vitamin water drinks, sweetened iced teas and lemonades<\/a>. These drinks have sugar added to them during processing and preparation.<\/p>\n Government has proposed that these drinks be taxed at a rate of 2.29 cents<\/a> per gram of sugar. This means that drinks with large amounts of added sugar will be more taxed more.<\/p>\n A 330 ml can of Fanta Grape contains nearly 10.5 teaspoons of sugar<\/a> and would be taxed an additional R1. A can of Coca-Cola (just more than 8 teaspoons of sugar<\/a>) would be taxed R0.80.<\/p>\n Drinks which contain natural sugars \u2013 like unsweetened milk and 100% fruit juice \u2013 would not be taxed. Sugar-sweetened drinks of which the sugar content is not disclosed on the packaging would be taxed at a fixed sugar level of 50 grams per 330 ml.<\/p>\n The World Health Organisation recommends that \u201cfree sugar\u201d should make up less than 10%<\/a>(about 12 teaspoons per day) of adults and children\u2019s total energy intake. This includes sugar added to food and drinks and sugar naturally present \u00a0in honey, syrups, fruit juices and fruit juice concentrates.<\/p>\n Reducing your intake to below 5% would provide additional health benefits, the organisation says.<\/p><\/blockquote>\n \u201cA combination of sources\u201d were used to calculate the figure, according to consultant Karishma Jivan of FTI Consulting, the media consultant for the Beverages Association.<\/p>\n \u201cWe used the analysis conducted by Manyema Hofman et al<\/i><\/a>\u2026 which indicates that average consumption of sugar-sweetened beverages is 184 ml per day,\u201d Jivan told Africa Check. She said this figure was found to be consistent with internal and industry sugar-sweetened drinks sales figures, which are not in the public domain.<\/p>\n The study Jivan referred to, published in 2014, used data from the 2012 South African National Health and Nutrition Examination Survey that was co<\/a>nd<\/a>uc<\/a>te<\/a>d by South Africa\u2019s Human Sciences Research Council<\/a> and the Medical Research Council<\/a>.<\/p>\n One litre of sugar-sweetened drinks was assumed to contain 430 calories. A daily intake of 184 ml would account for approximately 79 calories. This works out to 3.2% of an adult South African man\u2019s recommended diet<\/a> and 3.9% of an adult South African woman\u2019s recommended diet<\/a>.<\/p>\n However, this average percentage does not provide insight into the range of consumption, according to Dr Zandile Mchiza from the Human Social Research Council\u2019s Population Health, Health System and Innovation programme<\/p>\n \u201cSugar-sweetened drink calories are not evenly distributed to the population. Some people consume more energy from sugar added drinks than the others, while others do not consume at all,\u201d Mchiza explained.<\/p>\n \u201cHence we find some people gaining weight or presenting with ill health due to non-communicable diseases more than the others.\u201d<\/p>\n This percentage is not representative of the \u201caverage South African\u201d, as claimed by the Beverages Association. People surveyed for the South African National Health and Nutrition Examination Survey were 15 years and older. The study did not include any data on how much sugar-sweetened drinks children under the age of 15 consume.<\/p>\n Jivan conceded that the study\u2019s findings only referred to adult South Africans.<\/p>\n \u201cWhether [sugar-sweetened drinks] account for 3% or more or less of a child\u2019s daily intake is something we don\u2019t have data on,\u201d she said.<\/p>\n There is currently no representative data on how much sugar-sweetened drink children consume.<\/p>\n \u201cIt\u2019s a challenge because we only have localised studies,\u201d says Mchiza, \u201cwe need a full, national food consumption study to give us an idea of what is happening.\u201d<\/p>\n Sugar-sweetened drinks consumption varies between age groups, according to the study.<\/p>\n However, the study the Beverages Association based their claim on notes that the estimate may be on the low side.<\/p>\n \u201c184 ml is a conservative estimate, and is based on self-reported consumption,\u201d Aviva Tugendhaft, an author of the study and the deputy director of PRICELESS SA<\/a>, a unit of the Wits School of Public Health that aims to \u201cenable smart decisions about health investments\u201d, told Africa Check.<\/p>\n \u201cSelf-reported data is subject to recall bias, which often sees consumption under-reported.\u201d<\/p>\n The authors also highlight industry data that suggests the intake of sugar-sweetened drinks could be higher.<\/p>\n The Coca-Cola company estimated that South Africans on average consumed 160 ml of their beverages per day in 2011<\/a>.<\/p>\n This estimate \u2013 which is almost as high as the study\u2019s total sugar-sweetened drink consumption estimate \u2013 excludes the intake of sugar-sweetened drinks produced by other beverage manufacturers, such as Energade, Pepsi, Ceres, Liqui Fruit, Lipton Ice Tea, Coo-ee and Red Bull.<\/p>\n This claim was made in the Beverages Association\u2019s submission to treasury<\/a>, where it links the decrease in sales to job losses.<\/p>\n But how did they reach this figure?<\/p>\n The Beverages Association told us it is based on a 2016 study by Oxford Economics<\/a>, paid for by the association. Oxford Economics is an international consulting company that analyses market trends for businesses.<\/p>\n The association did not provide us with the study itself or the data it was based on, however.<\/p>\n BevSA claims there will will thousands of jobs lost due to the tax<\/p><\/div>\n Makgetla explained that according to Beverage SA\u2019s numbers, the production of sugar-sweetened drinks employs around 14,500 people. It claimed that for each person employed directly to produce the beverages, another 20 find work in the value chain.<\/p>\n \u201cThese figures [of numbers of jobs that would be lost] are patently exaggerated,\u201d Dr Neva Makgetla, a programme manager at the Trade and Industry Policy Strategies<\/a>, a non-profit independent research institution, told Africa Check.<\/p>\n She added that if a similar assumption was made about how many people are employed as a result of a single job in the formal manufacturing industry \u201cSouth Africa would have over 34 million employed people.\u201d<\/p>\n According to Makgetla, Beverage SA said that 3,400 jobs would be lost in the sugar-sweetened drinks production; 25,200 jobs would be lost in \u201cupstream\u201d jobs; 19,200-29,000 jobs in retail and 15,400 job losses directly and indirectly as a result of reduced demand for drinks.<\/p>\n Makgetla, who has written a policy brief on the sugar tax,<\/a> pointed out that the Beverages Association assumed that producers would not shift to producing \u201chealthier, untaxed drinks\u201d, which would result in more jobs.<\/p>\n She also added that with the funds raised from the tax, treasury could spend more on other programmes that would result in some jobs being created. This effect of the tax was not considered by the Beverages Association, Makgetla said.<\/p>\n Professor Hana Ross<\/a>, a principal research officer heading up the economics of tobacco control research team within the Southern Africa Labour and Development Research Unit (SALDRU)<\/a> at the University of Cape Town, made the same point.<\/p>\n She said she found it difficult to comment on the results without all the data and study methodology from Beverage SA. But based on the information provided to us, she told Africa Check: \u201cOxford Economics is not taking into account the fact that money not spent on sugar-sweetened drinks would be spent on other goods and services, thus creating jobs in other sectors.\u201d<\/p>\n By reporting gross job losses and not net job losses, the impact of the policy change is exaggerated, Ross said.<\/p>\n We asked\u00a0the Beverages Association\u00a0if their study had looked at possible gains in other industries. The study did not do so, Karishma Jivan, media consultant for the association, told Africa Check.<\/p>\n She said that the study\u2019s focus was on shifts in jobs within the non-alcoholic drinks\u2019 industry but it would not include shifts to other products.<\/p>\n Higher sugary drink prices will likely push consumers towards other drink products<\/p><\/div>\n So is there a way of working out what the net job losses would <\/i>look like?<\/p>\n Professor Corne van Walbeek, also working at SALDRU, told Africa Check that previous studies looking at this type of question use a \u201csocial accounting matrix\u201d (SAM) to work out whether jobs have been lost or gained when there is a shift from one industry to another.<\/p>\n Whether there are net job gains or losses depends on how machine-driven (capital intensive) the industry is.<\/p>\n For example, cigarette manufacturing is very capital intensive, so relatively few jobs in cigarette manufacturing are lost when there is a real or predicted decrease in smoking.<\/p>\n Usually, though, when there is a decrease in cigarette-smoking, people spend more on goods that are more labour-intensive to make, with the net result that there are net gains in jobs, Van Walbeek said.<\/p>\n A study looking at the effect of the sugar tax<\/a> in South Africa by Dr Evan Blecher, affiliated with SALDRU and the Economic and Health Policy Research programme of the American Cancer Society, showed that it is quite likely consumers will switch to other drinks. The study compared the effects of the proposed South African tax to a similar tax on sugar-sweetened drinks that Mexico introduced in 2014.<\/p>\n There, a tax of 10% per litre on all sugar-sweetened drinks led to a 10% decrease in buying of taxed drinks. It also led to a 7% increase in untaxed drinks (including a 13% increase in plain water purchases). \u201cThe early evidence\u2026 suggests that the tax is working,\u201d the study said.<\/p>\n Edited by Anim van Wyk<\/em><\/p>\n 7 questions for the minister of health on a proposed sugar tax for South Africa<\/a><\/strong><\/p>\n South Africans need a sugar tax because we\u2019re a nation of fatties<\/a><\/strong><\/p>\n\n
What about children?<\/h3>\n
Estimate could be conservative<\/h3>\n
![\"SA](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2016\/09\/SA-daily-average-consumption-of-sugar-drinks-640x405.png\")
<\/a><\/p>\n\n
![\"BevSA](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2015\/09\/Unemployment-line.png\")
<\/a>\u2018Job figures patently exaggerated\u2019<\/h3>\n
Need to report net job losses not gross losses<\/h3>\n
![\"Higher](\"http:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2015\/07\/Soft-drink.png\")
<\/a>Consumers quite likely to switch to other drinks<\/h3>\n
More on the sugar tax<\/h3>\n