MONTHLY BAROMETER - WELLNESS EDITION
By Thierry Malleret, economist
A must-watch global wellness issue: the continued march of sugar taxes. The UK sugar tax came into effect last Friday (April 6). It will be levied on manufacturers of soft drinks: those that contain 5 grams of sugar per 100 ml will pay 18p a litre as a opposed to 24p a litre for those that have more than 8 grams of sugar per 100 ml.
Health taxes, such as this one, are multiplying around the world as governments attempt to contain the rising costs of preventable diseases, particularly those that are obesity-related. Food and drink producers are being forced to adapt, and so are investors, punishing companies that do not move fast enough to reformulate their products with less sugar (or salt). Coke and Pepsi might be hit the hardest. While they remain among the best-selling carbonated soft drinks, the volume sales of their full sugar drinks have fallen by double digits over the past five years.
The trend in favor of healthier drinks is clear. Over the past five years, bottled water has been the fastest growing soft drink, both in the U.S. and Western Europe.