Health Promotions Levy – The Sugar Tax and Where We Are Now

“It ain’t over until the fat lady sings “-
the South African sugar tax finale

Authors: SANCDA Vicki and David Pinkney-Atkinson

Written for NCDA and published on the SANCDA website

After 18 months of public wrangling the Health Promotions Levy (HPL), also known as the “sugar tax”, is inching closer to a finale. With stakeholder consultation drawing to a close, a final step is an Act that includes a tax on sugary drinks. The decision must be made by legislative structures to implement or withdraw the tax. It is a final critical drama. For now.

The outcome cannot be taken for granted within the current South African political climate. In other words, it is a “don’t count your chickens until they hatch” scenario. A cliffhanger to the last. The South African NCDs Alliance (SANCDA), its partners and allies, have participated in the public roller coaster ride. It supports the tax as a positive step towards health in a whole package of interventions. Note, it is one of many planned but unfinanced interventions needed to promote health and kerb non-communicable diseases (NCDs). Sugar is the new tobacco.

If you are like us, the nuances of what it takes to pass a tax law are mysterious and not within our everyday grasp of life. So, get to know music overture to the final act of how this happens. In South Africa, this is how a law is tabled and passed.

Using the “sugar” and “tax” together is an oxymoron. Simply confusing with one seen as good and the other as bad. Like the “teenage brain”. So, from childhood we learn the following:

  • Tax is bad = “Nothing is certain but taxation and death.”
  • Sugar is good = “Sugar and spice and all things nice.”

So, sugar is good? Fact check: too much sugar, especially in a cheap and easy to access form like “soft drinks” or “sodas” is linked to obesity, diabetes, cancer, tooth decay and heart disease. The illnesses resulting from sugary drinks are estimated to have cost the South African economy R23 billion in 9 years to treat and fight obesity only. A local study shows R10 billion will be saved over the next 20 years if we count type 2 diabetes alone.

Tax is bad. So, predictably questions in our country are likely one of the following versions:

  • Why should I care, I don’t drink Coke and I am not fat?
  • This is another clever money grabbing way for the government to hit my shrinking wallet.
  • Don’t waste my money on a frivolous tax that will be wasted like so much of our money is already lost through wasteful expenditure and other nefarious means.

Let’s start by educating our people that this is an important issue that is bigger than simply saying “no” to sugary drinks. South Africans simply don’t know enough about the risks and dangers of too much sugar and its relationship to obesity and NCDs. This tax has just highlighted how much further must be done. It’s not simply about sugary drinks, these are the visible part of the problem

The cost of obesity and diabetes to South Africans is called the “burden of disease” and is often expresses as the number of people who get sick and die of certain diseases. It costs all of South Africa because our fragile health system must cope with most of the people and each of us have to pay for it in some way. It may be your mother or brother or child. Who cares for you when you have lost your leg to diabetes and can’t walk? Someone in your family needs to stop everything and care for you. This means that they and often you lose their income in caring for you.
Fact checks

  • South Africa is the fattest nation in sub-Saharan Africa
  • Diabetes the number 2 killer of people in South Africa after TB
  • Cutting sugar levels will cut obesity and crippling illnesses.

Our collective lack of awareness as a nation and education is why the SANCDA calls for part of the money collected to be used for the prevention of obesity and related non-communicable diseases (NCDs). NCDs in the health budget is neglected and underfunded, even though these illnesses are the leading cause of death in South Africa.

“Government is committed to increasing investment towards health promotion targeting non- communicable diseases alongside the implementation of the sugary drinks tax, such as diabetes screening and nutrition education.”
 Minister Pravin Gordhan, Budget speech 22 February2017

The SANCDA celebrates the proposed allocation of additional resources for health and NCDs prevention. We lament that organisations like CANSA, Diabetes South Africa and the Heart and Stroke Foundation with active programmes are not considered for funding. Let’s not forget over 10 cancers are linked to, and many children lose teeth because of sugar excess.

The HPL is a better, if not as catchy, name that puts the focus where it belongs on health promotion and primary prevention of obesity and NCDs.  The sugary drinks tax timeline in the box below shows where we have come from and where we are going in the “final” act for now.

As expected the food and beverage industry does not want this tax and has aggressively campaigned against it. The ultimate weapon, in a country with all-time high unemployment rates and in a technical recession, is to claim that massive job losses will result. Job loss claims range from 72,000 jobs to 5,000. The initial estimate from Treasury was less than 11% of those claimed.

The ball is firmly in the court of the food and beverage industry according to Treasury’s response published this week and presented to the Finance Standing Committee. If the beverage industry reformulates to meet the new requirements of 4g/100ml the job losses are estimated to be significantly less at 2,392 jobs across the sector.

The HPL isn’t only a tax digging into your pocket and costing you more. We, the South Africans, are acting now to change the health of our children’s future. We did it for HIV/AIDS now we need to do it for all of us once again. Take a lesson from the past. When taxes and levies were first placed on cigarettes it was met with the same view, but as money, educated people and the health risks became more abundant. You’d be hard pressed to find a single person upset about the cost of smoking and the measures taken to dissuade people from it. The HPL is here to stop an even greater cost to us in the next 10 years.

The introduction of the draft taxation bill in February is watered-down version with the taxation reduced by almost half. The graphic shows the details.

In our democratic society, the bill must be passed with the taxation of sugary drinks at any level to change the health of the nation.

As the discussion is set continue as we reach the final act. The SANCDA, together with its global and local partners, will keep monitoring the progress and keep you informed. These insights make what is being worked towards an evidence based path to follow having been tailored to fit the uniquely South African way forward. Together they are all working towards this goal finally becoming a reality.

We are committed to sharing experiences and lessons learnt in this crucial final act as we wait for the “fat lady to sing”.





1993 -2002 Taxation of “soft drinks and mineral water” by volume not related to sugar content. Repealed following lobby by the food & beverage industry.
2013 National Department of Health NCDs policy published including SSB tax is part of the effective measures to combat obesity and non-communicable diseases (NCDs).
2014 Food labelling and marketing to children regulation published (R429) and remains to be finalised.
2015 Publication of SA National Health Promotion policy & SA obesity control and prevention policy
February SSB tax announced in budget speech for implementation in 2017
July Treasury releases SSB tax policy paper recommending a 20% tax.
August ·         Closing date for comments

·         SANCDA submits comment.

November Treasury stakeholder workshop on the SSB
SANCDA makes a presentation
January 31 & February 14 Standing Committee on Finance – legislative activities to allow for implementation of tax
SANCDA make a submission
February ·      Budget speech announcing a reduced SSB tax in a draft tax bill

·      Tax rate reduce to half and amount of sugar to be taxed reduced.

·      Now called a “Health Promotion Levy” (HPL)

·      Unspecified part of money collected to be allocated for obesity prevention and diabetes care

May 28 & June 6 Standing Committee on Finance – more public hearings on HPL in the draft bill.

SANCDA makes presentation

4 June National Economic Development and Labour Council (NEDLAC) meetings on SSB tax
22 June Standing Committee on Finance meetings and publication of draft summary of findings
August Standing Committee on Finance decision referred to Council of the Provinces
2020 ê obesity by 10% national target to be achieved


Sugar wars: Coke faces first salvo in US false advertising lawsuit – Bizhubcommunity

This article originally appeared on written by Sharon Snell



Sugar wars: Coke faces first salvo in US false advertising lawsuit

Coca-Cola’s claims that their sugar-sweetened beverages (SSBs) are not linked to obesity, diabetes, and cardiovascular disease will be tested in a lawsuit, which could turn the whole tide on the so-called sugar wars.

Multi-billion dollar adspend

According to its 2015 annual report, Coca- Cola’s turnover was $44,294bn. They spend $3,9bn on advertising and $6,8bn on marketing that year.

In the lawsuit, advocacy group, The Praxis Project, alleges Coke deceives consumers about the health impact of their products.

Sugar wars: Coke faces first salvo in US false advertising lawsuit

It claims that the soft drink manufacturer does so independently, and also with the assistance of and through statements made by the American Beverage Association (ABA), a trade organisation which Coca-Cola funds and materially directs.

The NGO says Coke and ABA have engaged in a pattern of deception for years, aimed at misleading and confusing the public (and governmental entities that bear responsibility for the public health) about the scientific consensus that SSBs are linked to obesity, type 2 diabetes, and cardiovascular disease.

The lawsuit also claims that the company engaged in a pattern of deception to mislead regarding its advertising to children despite the company’s Responsible Marketing Policy, which makes the commitment not to advertise directly to children under 12.

It has also provided a plethora of examples where Coke and their executives had knowingly shifted the responsibility for the obesity and diabetes epidemics away from SSBs to a lack of physical activity.

What Praxis wants

Praxis seeks permanent injunctive relief, requiring Coca-Cola to:

  • cease all deceptive advertising and promotions that imply in any manner that sugar-sweetened beverage consumption is not linked to obesity, diabetes, and cardiovascular disease, and conversely is healthy;
  • cease all advertising that reaches children under the age of 12 in significant numbers;
  • fund a public education campaign to inform consumers about the association between sugar-sweetened beverage consumption and obesity, diabetes, and cardiovascular; and
  • disclose publicly their files on the potential health implications of consuming sugar-sweetened beverages.

Global assault on sugar
Praxis quotes the American Heart Association recommendations that a daily maximum of six teaspoons of added sugar for adult women and children, and nine teaspoons for men. In comparison, a 16-ounce bottle of Coke, has 12 teaspoons of sugar, a 15-ounce bottle of its Minute Maid cranberry grape juice beverage has approximately 13 teaspoons of added sugar, while a 20-ounce bottle of the company’s vitaminwater has eight teaspoons.

The World Health Organisation (WHO) Commission on Ending Childhood Obesity has made a call to governments to implement a 20% effective tax on sugar-sweetened beverages. Providing the key note address at the National Academy of Medicine, director-general of the WHO, Dr Margaret Chan said:

‘’When crafting preventive strategies, government officials must recognise that the widespread occurrence of obesity and diabetes throughout a population is not a failure of individual willpower to resist fats and sweets or exercise more. It is a failure of political will to take on powerful economic operators, like the food and soda industries. If governments understand this duty, the fight against obesity and diabetes can be won. The interests of the public must be prioritised over those of corporations.’’

Impact in South Africa

Given its growing levels of lifestyle conditions such as obesity and diabetes, South Africa is one of the countries that has heeded the WHO’s call through implementing a tax on SSBs (planned start date of 1 April 2017), a move that the local beverage industry has being staunchly opposing, largely through its industry association, Beverages Association of South Africa (BevSA).

Phil Gutsche, who is the chairman of Coca-Cola Beverages Africa has labelled this tax as “murderous to our industry” and “discriminatory” and claims that it would have the effect of taxing children and the poor. He averred that it had more to do with increasing revenue coffers rather than health.

If the lawsuit is successful in the US, it could have an interesting trickle-down effect on other parts of the world, including South Africa.

Coke foresaw risk

It would appear that Coke has foreseen the imposition of a levy on its products, and even legal action. Among the key risks to the sustainability of the business 2015 Annual Report, Coca-Cola listed that obesity concerns may reduce demand for some of their products due to:

  • new or increased taxes on sugar-sweetened beverages by government entities to reduce consumption or to raise revenue;
  • additional governmental regulations concerning the marketing, labelling, packaging or sale of their sugar-sweetened beverages; and
  • negative publicity resulting from actual or threatened legal actions against them or other companies in their industry relating to the marketing, labelling or sale of sugar-sweetened beverages may reduce demand for or increase the cost of their sugar-sweetened beverages, which could adversely affect their profitability.

The lawsuit, which was launched on 4 January 2017, is being brought under California’s unfair competition law and false advertising law to stop Coca-Cola and the ABA from conducting false and misleading marketing of their sugar-sweetened beverages. If successful, it would have a significant impact on Coke’s business and opens the floodgates to product liability claims.

The SA NCD Alliance holds no rights to this article its content and facts. The rights and words belong to the original author and website.