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Healthy Food Subsidies and Unhealthy Food Taxation: A Systematic Review of the Evidence

Abstract: The Global Burden of Disease Study and related studies report that unhealthy diet is the leading risk for death and disability globally. Given the evidence associating diet and non-communicable diseases (NCDs), international and national health bodies including the World Health Organization and United Nations have called for population health interventions to improve diet as a means to target NCDs. One of the proposed interventions is to ensure healthy foods/beverages are more accessible to purchasers and unhealthy ones less accessible via fiscal policy, namely taxation and subsidies. The objective of this systematic review was to evaluate the evidence base to assess the impact of healthy food/beverage subsidies and unhealthy food/beverage taxation. A comprehensive review was conducted by searching PubMed, Medline, and Google Scholar for peer-reviewed publications and seventy-eight studies were identified for inclusion in this review. This review was performed in keeping with Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidance. Although moderate in quality, there was consistent evidence that taxation and subsidy intervention influenced dietary behaviors. The quality, level and strength of evidence along with identified gaps in research support the need for further policies and ongoing evaluation of population-wide food/beverage subsidies and taxation. To maximize success and impact, this review suggests that food taxes and subsidies should be a minimum of 10-15% and preferably used in tandem. Implementation of population-wide polices for taxation and subsides with ongoing evaluation of intended and unintended impacts is supported by this review.


Alex’s Notes: Last week we looked at an exhaustive review and meta-analysis of the associations between food groups and diet-related chronic diseases (DRCD), which suggested that a plant-based diet focused on nut, legumes, whole-grains, fruits, fish, coffee, and tea was the most protective against a variety of DRCDs. Why does this matter? It matters because of studies such as the Global Burden of Disease Study 2010, which was a comparative risk assessment of burden of disease and injury attributable to 67 risk factors and risk factor clusters published a couple months ago in the Lancet.

For those interested, I highly recommend checking the study out as it holds some fascinating information. Overall, over 12.5 million deaths worldwide are attributable to diet and physical inactivity. Of these, 8.6 million deaths are attributable to diets low in fruits, nuts, and omega-3 fatty acids from seafood. Even worse, poor diet and physical inactivity cost the world over 250,000 disability-adjusted life years annually, which is a measure of the number of years lost due to ill-health, disability, or early death. Again, the low fruit, nut, and seafood omega-3 diet accounts for 183,000 of these life-years.

These unhealthy lifestyles cost billions of dollars every year, threatening the global economy and sustainability of health care systems. To address this issue, many governmental agencies (41.2 pg. 8) believe that dietary interventions are necessary, with food subsidies and taxation being two ideas commonly thrown around. This brings us to the current review article, which explored the potential effectiveness of food subsidies and taxation on healthy population-wide dietary intake.

In total, 78 studies, reviews, and mathematical models for Western populations (Europe, North America, and Australia & New Zealand) were included in for analysis. Three review articles concluded that

  1. Pairing subsidies on healthy food with taxation on unhealthy food were recommended to be the most effective,
  2. Establishing a tax of at least 20% was necessary to have a beneficial health impact,
  3. An estimated 80% of interventions were either cost-saving or cost-effective, and
  4. Population-based subsidies combined with taxes are likely to be the most cost-effective and impactful.

Additionally, 33 modelling studies found that subsidies on healthy foods such as vegetables, and taxes on unhealthy foods above 10-15% can be beneficial. One review of 160 price elasticity studies determined that a 10% tax on soda and soft-drinks would reduce consumption by 8-10%, and a separate study found that a penny-per-ounce tax on sugar-sweetened beverages in the USA would reduce consumption by 15%, generate roughly $13 billion annually in revenue, and save more than $17 billion annually in medical costs.

Thirteen empirical studies continue to lend support with another review of 38 studies suggesting that food consumption could indeed be influenced by taxing fast foods and sugar-sweetened beverages while subsidizing the cost of vegetables and fruits. At the same time, however, experimental studies have equivocal results. Price changes have been shown to modify food purchases, but the nutritional outcome is uncertain due to potential substitution effects. Moreover, experimental studies use targeted settings are not necessarily generalizable to larger populations, which is exemplified by the fact that 60% of Americans are against soda taxation.

Bottom line

The concept sounds great: tax “bad” food and use the revenue to subsidize “good” food and enjoy the medical savings these policies generate. The review at hand suggests that a subsidy and/or tax of a minimum of 10-15% is needed to be impactful, and are preferably used in tandem. This completely ignores the socio-economic inequalities, however, and also looks over the substitution effect. Similarly, implementation, to include legislative approval and industry proponents, remains a barrier.

But I suppose that all we can do at this point is speculate about benefits, drawbacks, and so forth. We won’t truly know the outcomes until they happen. Thus, the bottom line is really that we need more long-term studies at a population level to establish a stronger quality of evidence.

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