Tax

Sugar tax ‘blunt instrument to a complex problem’, warns MHA

Mark J Lumsdon-Taylor, who is a senior corporate consultant at MHA, made the comment in response to the publication of an independent report on England’s National Food Strategy led by businessman Henry Dimbleby and endorsed by chef Jamie Oliver

A senior corporate consultant at MHA, has labelled England’s proposed sugar and salt tax as a “blunt instrument to a complex problem”. 

Mark J Lumsdon-Taylor, who is also a specialist in food and farming, made the comment in response to the publication of an independent report on England’s National Food Strategy led by businessman Henry Dimbleby and endorsed by chef Jamie Oliver. 

The main recommendations of the report called for a sugar and salt tax to be imposed, to combat obesity levels in the country. 

Lumsdon-Taylor said that while the tax may be “a fine idea in principle” it needs “very careful” forethought to ensure it “does not go wrong”. 

He said: “When imposing a tax intended to change behaviour you need to know who will end up paying it. It seems unlikely price rises will be passed onto consumers because of how competitive grocery retail is. This means if a sugar and salt tax is intended to directly change consumer behaviour it is likely to fail. These are primary ingredients in the food chain.

“The report’s authors are banking on the tax changing the behaviour of food producers. This did happen in part following the introduction of the soft drinks levy in 2018 when producers responded with a lot of recipe innovations.”

He added: “The trouble here is the recommendations look very draconian and are liable to drive manufacturers and producers out of business before actually driving reforms.

“For example, the price a large food processor is charged per kilo of sugar is 50 pence. The report proposes a £3 tax per kilo: a 600% price increase in direct costs. If this cost cannot be passed on, which we have good reason to think it cannot be, businesses and sectors will vanish overnight, and the end result will be unemployment, not reformed consumer habits.”

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