Not so sweet
Local beverage company hit by levy
In the wake of Government’s imposition last August 1 of the ten per cent tax on sweetened beverages, this island’s leading beverage maker is reporting that its business has suffered “a definite hit”.
Without giving the actual figures, Sophia Cambridge, the corporate communications spokeswoman for Banks Holdings Limited, told Barbados TODAY that soft drink sales were “definitely down” following implementation of the measure.
The two leading distributors – SMJ Beverages (Barbados) Inc and Massy Distribution – said they were yet to fully assess the impact of the levy, which was projected to generate in excess of $10 million for Government in Year 1, but at the end of the first six months only $2 million of that amount had actually been collected by the Treasury, according to officials.
Revenue performance apart, Minister of Finance Chris Sinckler, in making the announcement during last year’s Budget presentation, had said that one of the primary objectives of introducing the levy on sweetened beverages, including carbonated soft drinks, juice drinks, sports drinks and fruit juices with sweeteners, was to get Barbadians to lower their caloric intake.
In this regard, he had also promised that a review would take place in about two years time to determine its effect on the behaviours of producers, importers and consumers, and whether it should be extended or intensified.
However, one of this island’s most respected medical doctors believes there is no need for Government to delay raising the tax.
Concerned that it has not acted as enough of a deterrent to sweetened drinks consumption, retired medical practitioner Sir Henry Fraser said while the tax was “a good start”, he believed sweet drinks consumption should be taxed even higher.
The independent Senator has also called for a study to be carried out to see if the tax had an impact on consumption patterns since its implementation.
“My view, and the view of many other medical practitioners, is that the tax should be greater. This is being done in other countries. The British are now doing it, but a tax has got to be significant in order to affect people’s behaviour and I think the tax should be greater,” said Sir Henry.
The former Dean of the Faculty of Medicine at the Cave Hill Campus of The University of the West Indies said he believed there was also need for greater public education on the matter of sugar consumption.
“We have a Government Information Service which is not given enough radio and media time. We have a National Nutrition Centre, which was successful in eliminating infant malnutrition 30 or 40 years ago. The National Nutrition Centre educated the people to raise their children right. And we need therefore to have a comprehensive approach to education,” Sir Henry said, adding that while some agencies were doing a good job, it was simply not enough because the population needed to be “blanketed” with the information.
“Government is always in a quandary with taxes. If the tax is too high, people shout and scream and cry out and complain and then they become anti-government. So the Government wants to do the right thing without going overboard. But in my judgement they could have made a bit more of the tax,” he added.
Also sharing a similar sentiment was chairman of the Barbados Private Sector Association (BPSA) Alex McDonald, who told Barbados TODAY he believed if there was a move to change behaviour, “the taxation would have been higher”. He added that there was “nothing wrong with the concept” of a sweet drinks tax.
“It would have been a prohibitive tax. It would have been applicable if you really, really wanted a sweet drink. It would be prohibitive if you want to change behaviour, and equally
you would have put an incentive in terms of making it easier to buy healthier drinks. They would have been relatively cheaper,” said McDonald.
Barbados TODAY also spoke to some residents who said they did not witness any change among their peers, family members and friends in relation to their consumption patterns when it comes to sweetened beverages.
One woman, who would only give her name as Laurene, said she believed “health conscious people would be happy” for the tax, but said the people she knew who drank sweetened beverages before the tax “still use them just as before.
“It doesn’t bother me because I am not a soft drink person anyhow, but I don’t know how much it will help,” she said.
Laurene suggested that authorities “just need to keep preaching” to the population about changing their habits, but quickly pointed out that while some would listen, others would not.
The issue also came up for discussion during a special event hosted by the Pan American Heath Organization (PAHO) ahead of today’s World Heath Day celebrations, with Minister of Health John Boyce telling Barbados TODAY he could not shed any light on the situation since officials in his Ministry were still measuring the impact of this tax.
However, PAHO representative to Barbados and the Eastern Caribbean Dr Godfrey Xuereb openly praised Government for its implementation of the tax on sweetened drinks.
He also called on Government to make Barbados “a trans-fat free island”, saying “this will rid us of another manufactured substance, which has led to the deterioration of the quality of the national diet”.
“Be it the food that we grow locally, or those that we import, be it the availability of healthy options in schools and in our work places, be it the cost of healthy and unhealthy foods, we all have a role that we can play in assisting Barbados become a healthier nation,” he added.