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Osborne’s Fizzy Drinks Tax: An Unconservative Assault On Free Markets And Consumer Choice

UK Chancellor George Osborne has used his latest budget to declare war on free markets and consumer choice – in the guise of protecting vulnerable souls from the deadly threat of fizzy drinks.

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Note the weasel justification that this will “encourage companies to reformulate by reducing the amount of added sugar in the drinks they sell.”

But as Christopher Snowdon of the Institute of Economic Affairs points out the fizzy drinks industry already made this move years ago, without any sledgehammer fiscal nudging from headline-grabbing politicians.

Osborne says he hopes the makers of fizzy drinks will reformulate their products. They have already done so. They are called things like Diet Coke, Pepsi Max, Coke Zero and Coke Life.

If people don’t want to drink weird tasting drinks made with vile stuff like saccharine it is certainly not for want of product availability. Indeed, when I go round to people’s houses and they mix me a gin and tonic I all too frequently find myself going “bleeuch” and then having to chuck the noisome concoction down the sink because what they have given me is “Slimline” tonic made with some filthy chemical rather than proper tonic made with nice, wholesome sugar.

Snowdon has done a lot of research into the issue of taxes on sugary drinks and found them to be utterly pointless, except as a crude revenue raising tool.

First, fizzy drinks are price inelastic – that is, consumption isn’t reduced much when the price goes up – it just hits regular drinkers, especially the poor, harder.

Secondly, it seems to have no broader health benefits since those who do give up drinking fizzy drinks tend to get their sugar from other cheaper sources instead.

Thirdly, it’s a very expensive way of achieving very little.

In New Zealand, for example, advocates claim that a 20 per cent tax on soda would save 67 lives per year and raise $40 million (NZ).[12] Leaving aside the reliability of the New Zealand forecast, this works out as a cost of $600,000 (NZ) for every life that is extended and does not represent good value for money.

Fourthly, soft drinks form a negligible part of Britain’s sugar intake – just 3 per cent of the total.

And that’s before you consider the assault on freedom of choice.

A few years ago, when George Osborne and I used to have kids at the same school and his party was languishing in opposition, I used to berate him in the playground about how insufficiently Conservative the Conservative party had become under David Cameron.

“You wait until we get into power!” Osborne would promise.

Well, now he is in power. Has been for years. And guess what?

George Osborne is still not a Conservative.

 

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