COPENHAGEN: The cost of the sugar tax in Philly is already being passed on to the consumer. A recent report from the left-wing Australian think tank the Grattan Institute urged Australia to impose an excise tax of 40 cents per 100 grams of sugar on all non-alcoholic, water-based drinks with added sugar. The rationale behind the tax is to combat the country’s rising obesity rate, with the Institute claiming the tax would lift the price of a two-liter soft drink by around 80 cents to raise about $500 million a year in extra revenue.
The recommendation has – unsurprisingly – gained support from the Greens, the Public Health Association of Australia and even UK celebrity chef Jamie Oliver. But the federal government should look to the USA with serious caution before considering such a proposal.
Look at the recent sugar tax in Philadelphia, the largest city in America to introduce a specific tax for soda and sugary beverages (something previously confined to progressive communes like Berkeley, California). Locals in Philadelphia are reeling after prices have almost doubled. City officials were adamant the tax was intended to hit distributors of sugary drinks, but basic economics has proved victorious once again: the cost of the tax is being passed on to the consumer.
