Governments Have the Power to Nudge Us Toward Healthier Food Choices

by Jon Scaccia October 9, 2024

Governments worldwide have been using taxes and subsidies as tools to change what we eat. By imposing taxes on sugary drinks and unhealthy foods while offering subsidies for healthier options, policymakers aim to encourage healthier diets and reduce the burden of obesity and related diseases. But how effective are these fiscal policies, really? A recent review provides important insights that public health practitioners, policymakers, and researchers should consider.

The global obesity epidemic is no secret. In countries like Scotland, 65% of the population is either overweight or obese. Unhealthy diets contribute to rising rates of chronic diseases like type 2 diabetes, hypertension, and cardiovascular issues. Governments are keen to address this challenge, but influencing dietary habits is tricky. Fiscal policies—like taxes on sugar-sweetened beverages (SSBs) or subsidies for fresh produce—are one way to incentivize healthier food choices.

Why Taxes and Subsidies?

We’ve long known that price drives consumer behavior. When unhealthy foods are cheap and convenient, people are more likely to buy them. Conversely, making healthier foods more affordable can steer choices toward nutritious alternatives.

The World Health Organization (WHO) strongly supports fiscal measures like taxes and subsidies to shift people away from foods high in sugar, fat, and salt. Many countries, from Mexico to Norway to the United Kingdom, have implemented these policies with varying success. The big question is: do they work?

What the Research Says

In a sweeping review of 127 studies conducted in over 24 countries, researchers found compelling evidence that fiscal policies are effective in changing dietary behavior. Let’s break down the key takeaways.

1. Taxes on Sugary Drinks Work
   Countries that have introduced taxes on sugary drinks saw a significant reduction in consumption. For example, Mexico’s sugary drink tax led to a 5.5% drop in sugary drink purchases in just the first year. Similarly, the United Kingdom’s Soft Drinks Industry Levy reduced the average sugar content of soft drinks by nearly 30%.
2. Healthier Choices Become More Affordable
   Several countries, such as Bermuda and Tonga, have implemented both taxes on unhealthy foods and subsidies for healthier options. These policies have led to a noticeable shift in purchasing behavior. In Tonga, for instance, sales of bottled water increased significantly after a tax on sugary drinks was introduced, showing that consumers gravitated toward healthier choices when prices were adjusted.
3. The Impact on Health
   Perhaps the most encouraging finding is the effect these policies have on public health. In the Philippines, a sugar-sweetened beverage tax could prevent an estimated 5,913 deaths related to diabetes over 20 years. In Denmark, a tax on saturated fat is projected to save over 100 lives annually by reducing the risk of heart disease.
4. Low-Income Households Face Challenges
   While fiscal policies are generally effective, they can place a heavier financial burden on lower-income households, who are often the biggest consumers of cheap, unhealthy foods. This is a challenge that governments must address by ensuring that subsidies for healthier options, like fruits and vegetables, are readily available to all socioeconomic groups.

How Fiscal Policies Are Reshaping the Food Environment

Fiscal policies don’t just change what’s in your shopping cart—they also impact the broader food environment. In Mexico, for example, the tax on sugary drinks has encouraged the reformulation of beverages to reduce sugar content. In other words, manufacturers are responding by creating healthier products to avoid the tax, benefiting consumers indirectly.

Similarly, in France, a soda tax reduced purchases of sugary drinks, and the government is now using the increased revenue to fund public health programs. It’s a win-win scenario: healthier consumers and more resources to fight chronic diseases.

However, not all fiscal policies have the same level of success. In Norway, an increase in the tax on sugar products did not significantly reduce sales, likely because the tax wasn’t high enough to change consumer behavior dramatically. This highlights the importance of setting the right tax rate to achieve meaningful impact.

Challenges and Considerations

Fiscal policies are a powerful tool, but they’re not without limitations. As mentioned earlier, they can disproportionately affect lower-income households, who may not have easy access to healthier alternatives. Governments must ensure that subsidies for nutritious foods are part of the solution. A tax without a corresponding subsidy could inadvertently widen health disparities rather than close them.

Additionally, the review pointed out the phenomenon of “cross-border shopping.” In areas where taxes on sugary drinks are high, consumers may simply travel to neighboring regions to buy cheaper products. This has been observed in cities like Oakland, where residents cross borders to avoid taxes on unhealthy foods. Policymakers need to be mindful of such unintended consequences.

Practical Implications for Public Health Practitioners

So, what can public health practitioners take from this research?

• Advocate for Comprehensive Policies: Taxing unhealthy foods is a step in the right direction, but it’s not enough. Advocating for subsidies on healthy foods will ensure that people have affordable access to nutritious alternatives.
• Target Vulnerable Populations: Taxes on unhealthy foods often affect low-income households the most. Strategies that prioritize these groups—such as ensuring access to affordable, fresh produce—can mitigate the negative financial impacts while promoting healthier diets.
• Collaborate with Governments: Public health experts should collaborate with governments to monitor and evaluate the effectiveness of fiscal policies. Data collection and analysis are essential for tweaking policies to maximize their positive impact.

Join the Conversation

As governments worldwide continue to experiment with fiscal policies aimed at improving public health, there’s a growing conversation about their effectiveness and fairness. We’d love to hear from you!

• What fiscal policies do you think would make the biggest difference in your community’s food environment?
• Do you believe that taxing unhealthy foods is the best way to promote healthier eating habits, or are there better alternatives?

Feel free to share your thoughts in the comments or on social media using #HealthyEatingForAll.

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