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    Sugar tax: Thousands 'might lose their jobs'

    The proposed sugar tax will leave a sour taste in the beverage industry, which says it believes that the resultant drop in sales will result in thousands of job losses.
    Sugar tax: Thousands 'might lose their jobs'
    © cipariss – 123RF.com

    Draft Treasury regulations propose a tax of 2c/g of sugar in sweetened drinks. The beverage industry says that this could lead to price increases of up to 30% on some drinks. It said 60,000 jobs would be lost because fewer cooldrinks would be bought.

    "It's most likely to affect small businesses, such as spaza shops, disproportionately," said Beverage Association of SA executive director Mapule Ncanywa.

    The proposal is out for comment until 22 August.

    A study by the Priceless unit run by Wits University's professor Karen Hofman showed that a tax of 20% on sugared drinks could result in a decrease of more than 220,000 in the number of obese adults.

    But Ncanywa contended that the effect on weight would be negligible because only 3% of the average South Africans' energy intake was from sugared drinks.

    Hofman said the industry's job loss estimates "are implausible and hypothetical".

    The industry said that a sugar tax in Denmark was scrapped in 2014 because it did not reduce sugar intake. Instead, Danes crossed the borders to buy sugared drinks.

    Defenders and opponents of the sugar tax cited studies of a similar tax in Mexico to make their point.

    Industry studies of the effects of a sugar tax have not been published independently or peer-reviewed.

    Even though Ncanywa said that sales had not fallen significantly in Mexico since the introduction of the tax, she said the beverage industry estimated that 40000 jobs would be lost in Mexico because of the tax.

    Hofman responded: "How did the Mexico sugar tax lead to job losses if sales were not significantly affected?"

    Source: The Times



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