Taxes Highly Effective as Part of Comprehensive Food-Related Policies in Chile, Study Finds

August 31, 2017

Photo by Stephany Duda, courtesy Gillings School of Global Public Health.

More comprehensive taxes on sugar-sweetened beverages and ultra-processed foods would promote a healthier diet in Chile, according to a new study from authors at the University of North Carolina at Chapel Hill Gillings School of Global Public Health.

Chile currently has the highest consumption of sugar-sweetened beverages (SSBs) in the world. It also has very high junk-food intake and obesity prevalence. The country is one of just a handful worldwide that have implemented a small tax on SSBs, as well as marketing controls and front-of-package labeling of unhealthy foods and beverages. To study what effects more dramatic tax policies might have on diet and well-being in the country, researchers used a model to compare three different policy options.

The full article, “Designing a tax to discourage unhealthy food and beverage purchases: The case of Chile,” was published online August 8 in the journal Food Policy.

Authors from the Gillings School include Juan Carlos Caro, doctoral student in the Department of Health Policy and Management and researcher at the University of Chile’s Institute of Nutrition and Food Technology, as well as Shu Wen Ng, associate professor, Lindsey Smith Taillie, research assistant professor, and Barry M. Popkin, W.R. Kenan Jr. Distinguished Professor, all in the Department of Nutrition.

The taxes the researchers chose to simulate were (1) an 18 percent price tax on all foods and beverages exceeding set thresholds for sodium, saturated fat and added sugar, and for which marketing is restricted (based on current Chilean law); (2) a 40 percent tax on SSBs only (which would be 22 percent higher than the current tax level); and (3) a tax of one Chilean peso (0.2 United States cents) per gram of sugar on products with added sugar.

The simulations predicted that these taxes all would result in a reduction in consumption of unhealthy beverages and foods, with the change in consumption being proportionally larger with respect to a larger price increase. These results were consistent among different socioeconomic sub-populations.

Overall, the 18 percent tax on foods and beverages high in fat, salt and sugar was associated with the largest reduction in household purchases of sodium, added sugar, saturated fat and high-calorie items.

“Chile already has been a global leader in instituting important regulations against unhealthy food marketing that targets children and requiring front-of-package warning labels, based on strong and science-based nutritional criteria,” Popkin said. “We undertook this study at the request of the Chilean Ministry of Finance and leaders in their Congress; they were looking for a planning tool for a future push toward preventing obesity and creating a healthier Chilean diet. Our models found that a tax policy aligned with the same nutritional criteria as their marketing law will result in the most meaningful reductions in purchases of packaged products that are high in nutrients of concern.”

The findings emphasize the power of tax policies to promote healthier diets, and the researchers suggest that a more comprehensive tax in Chile is a critical next step to enhance the overall effect of food-related public health policies. Given that certain foods and beverages already have been delineated as unhealthy by marketing controls and front-of-pack labeling, more comprehensive tax policies would do more to further promote healthier diets.

“Moreover,” noted Ng, “the revenue generated by such a tax should be directed toward programs such as subsidizing healthier foods and beverages or providing healthier school meal programs, which could enhance the health impact of the fiscal policy.”