Sugar tax can address Malaysia’s rising obesity issue

By SHAZNI ONG / Pic By BLOOMBERG

The government’s decision to impose an excise duty on sugar-sweetened beverages will address the ongoing obesity issue faced by the country.

In a report by the Economist Intelligence Unit titled “Tackling Obesity in Asean” last year, Malaysia has the biggest obesity prevalence among the countries in South-East Asia. The report put Malaysia’s obesity prevalence at 13.3%, while overweight at 38.5%.

Other reports suggest Malaysia is among the most obese countries in Asia with almost half of all adults overweight.

The government had imposed a sugar tax of 40 sen per litre for non-alcoholic, fruit and vegetable beverages in the latest budget.

The move makes Malaysia among the countries that have imposed such levy on sugary drinks, similar to Brunei, France, Mexico, Saudi Arabia, Thailand and the UK.

Galen Centre for Health and Social Policy said the tax was long overdue.

“We welcome this decision to reduce sugar consumption as a means of encouraging healthy living, but sounds caution on expectations,” said its CEO Azrul Mohd Khalib in a statement on Monday.

He sounded caution on the effectiveness of the tax to reduce obesity.

“Studies from the UK, Chile and Mexico, which have implemented this measure, have shown that in the short term, young consumers (between 13 and 30 years old) who are price-sensitive will very likely reduce their sugar consumption by up to 80%.

“Older individuals and those who already have high-sugar diets for decades are unlikely to change habits and are relatively insensitive to price increases. In the long term, consumers will very likely be desensitised to the price difference, requiring additional tax increases in the future,” he said.

Azrul said in order to increase its effectiveness, the tax should be applied to manufacturers and not at the point of retail, which is similar to how it is done in the UK.

“This will incentivise manufacturers to reduce the sugar content in their products to avoid being taxed.

“The truth is that we cannot depend on Malaysian consumers to change and adopt healthy choices and habits,” he said, referring to the local consumers who have a diverse selection of food and beverages.

“The beverages being taxed are but a small proportion of food and drinks which are of poor nutrition and high in fat, sugar and salt.

“Consumers will switch or increase (their) preference to familiar alternatives such as sirap bandung, Milo, teh tarik, kopi susu and three-layered tea.

“The list is long and arguably more problematic than soda drinks as they are consumed by the majority of consumers. These beverages will unfortunately escape taxation,” he said.

Azrul said the sugar tax revenue should could be used to fund health programmes designed to deal with non- communicable diseases (NCDs), specifically diabetes and cancer, as well as risk factors such as obesity.

“Earmarking this revenue, along with that collected from tobacco and alcohol, will help address the current shortfall in funding for NCD-prevention programmes,” he said.

Meanwhile, Sage Asia VP and MD Arlene Wherrett viewed such a law may also help the government as savings in healthcare would directly help reduce expenditure, helping the government to better use the monies saved elsewhere.

“This is a policy intervention which has been pitched at influencing healthy behaviours, rather than a measure for the government to collect taxes,” she said in a statement.

Wherrett said advocates of sugar taxes do make references to the success of tobacco taxes when justifying why they think a sugar tax will work to lower soda consumption.

However, where the main concern with tobacco is cancer, the main concerns with soda are diabetes and obesity, a major disease and condition, she said.