sugar tax

Proposed sugar tax rejected by leading retail associations

Leading retail associations, including the Australian Association of Convenience Stores (AACS) and the National Retail Association (NRA), have opposed the Health, Aged Care and Sport Standing Committee’s proposed sugar-sweetened beverages tax.

The Committee has recommended that the Australian Government implement a levy on sugar-sweetened beverages that is graduated according to the sugar content.

Theo Foukkare, CEO of AACS, said they do not support this proposed simple approach to this very complex issue.

“Strong evidence from countries around the world that have implemented a sugar tax clearly shows that this does not achieve the desired health outcome of reducing childhood obesity rates. All it does is increase the price consumers are paying for their beverages without changing behaviour.”

Foukkare highlighted the fact convenience retailers continue to provide consumers with choce through increased ranging of low and no sugar products.

“In 2024, 49 per cent of all litres sold nationally across all petrol and convenience retailers was low or no sugar, and this trend continues to grow year on year. Over the last five years, low and no sugar beverages sales contribution to total packaged beverage sales have grown from 23 per cent of sales to 30 per cent, so consumers are making the change through increased availability.”

Dr Alan Barclay, Health and Nutrition Committee at the NRA, said recommendations would hurt both retailers and consumers at the height of a cost-of-living crisis.

“A sugar tax would put pressure on the whole supply chain, from struggling households and small family businesses to canegrowers. It may further increase food insecurity which is already affecting nearly one in two Australian households.

“We believe our leaders should focus on bringing down prices and costs as their highest priority, rather than dreaming up new taxes on consumers that will drive up prices for everyday Australians and reduce margins for struggling small business owners.”

Dr Barclay said there is already a de facto sugar tax in Australia – the GST.

“Core foods are GST-free, making it 10 per cent cheaper than discretionary foods and drinks like soft drinks. If a 10 per cent tax doesn’t change behaviour, how high do they think the new consumer tax should be?”

Foukkare said that in many cases retailers have moved to promoting low or no sugar products as the primary advertising vehicle.

“Additionally, external advertising has shifted from always being full sugar products to now being split more evenly to include low and no sugar products. Growing consumer demand has also seen retailers increase ranging of better for you functional low and no sugar products in store and we see this trend continuing in the years ahead.”

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