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An analysis of public policy instruments for improving eating habits (2019:10)

On behalf of the Government, Statskontoret (The Swedish Agency for Public Management) has surveyed and analysed how public governance can be strengthened in order to promote healthy eating habits. The commission has pertained to economic policy instruments in the area of foodstuffs and restrictions on the marketing of unhealthy foods to children. Our survey indicates that the problems with unhealthy eating habits require a cross-sectoral approach, and that economic policy instruments in the area of foodstuffs and restrictions on the marketing of unhealthy foods to children may contribute to successful outcomes in this regard.

Unhealthy eating habits are one of the biggest risk factors for ill health

Unhealthy eating habits are one of the biggest risk factors for ill health and premature death in Sweden. Unhealthy eating habits and insufficient physical activity also result in significant costs for society, for example in terms of healthcare and production shortfalls. This means that initiatives with the potential to influence our lifestyles are also justified from an economic perspective.

The percentage of the population who are considered overweight and obese has increased. This is due, among other things, to fewer physically active occupations, less travel by foot and bike, relatively lower food prices, larger portion sizes, increased food availability, a wider selection, and the marketing of unhealthy foods. In relation to the recommendations, we do not eat enough vegetables, fruits, whole grains, vegetable oils, fish and shellfish. At the same time, the consumption of sweet beverages, pastries, high-fat dairy products, salt, red meats and charcuterie is too high.

The use of economic policy instruments can have an effect on consumption and health

Statskontoret has compiled and analysed knowledge on the subject of using economic policy instruments to promote health.

Excise duty on beverages with added sugar is the most common economic policy instrument

The economic policy instrument most widely used in Europe is excise duty on beverages with added sugar. Our legal analysis indicates that this excise duty may be in line with EU law, if it is specifically justified on health grounds.

Research shows that a tax on beverages with added sugar, if properly designed, can produce positive effects on consumption and health. It can create incentives for individuals to choose healthier products and for producers to reduce the sugar content in the products. In order for this tax to be effective, it should be targeted broadly at beverages with added sugar. A scale which entails that beverages with a higher sugar content are taxed more can increase the effectiveness of the measure. For example, Ireland and the United Kingdom have chosen to use two tax levels based on sugar content, while at the same time beverages with less than 5 grams of sugar per 100 ml are not taxed at all.

Research shows that excise duties on unhealthy foods can contribute to reducing health inequalities. Households with a lower level of education and lower incomes generally consume more unhealthy foods, they have higher rates of overweight and obesity and an increased risk of cardiovascular disease. At the same time, research indicates a risk of the tax increasing economic inequalities.

A broader tax on foodstuffs with a high sugar content has significant delimitation problems

A tax on beverages with added sugar targets a product category that accounts for a small proportion of the population's total calorie intake, which limits the effects that the tax may have on the overall health of the population. Broader taxation which encompasses more high-sugar foodstuffs would therefore be preferable from a health perspective. There are also examples of countries that tax other unhealthy foods. For example, Norway has a tax on chocolate and certain other products with a lot of sugar.

However, taxes on this type of food have proven to be associated with significant delimitation problems. This is because it is difficult to avoid taxing similar products differently. The tax then risks being in conflict with EU law's principle of free movement. Finland, for example, scrapped its tax on sweets and ice-cream following a complaint to the European Commission indicating that equivalent unhealthy products are not being taxed in the same way.

There is limited knowledge concerning a reduced value added tax on fruit and vegetables

Based on the research review, our assessment is that reducing value added tax on healthy foods can help to increase the consumption of such foods. At the same time, however, few countries have tried to subsidise fruit and vegetables, which means that knowledge on such a measure is limited. In Sweden, it would be possible to reduce the value added tax on these foods from 12 per cent to 6 per cent without any greater changes to the law. The impact of the measure depends, among other things, on how much prices fall at the consumer level.

Potential economic policy instruments need to be clarified in order to analyse the consequences more closely

Based on international research, Statskontoret has analysed the possible effects and consequences of using taxes to promote healthy eating habits in Sweden. We would like to emphasise that there are significant differences between the problems, consumption patterns and tax systems of different countries. This means that results from other countries cannot be translated directly into Swedish conditions. In order to carry out quantitative analyses of effects on consumption and health, the formulation and delimitation of the measures being analysed would also have to be clarified. Such clarification would also be required in order to assess the increased administrative workload for government agencies and companies entailed by the measures.

Restrictions on the marketing of unhealthy foods can reduce consumption among children

Statskontoret has also compiled and analysed knowledge on the subject of restrictions on the marketing of unhealthy foods to children.

Legislation generally yields the best effect

International research shows that measures that restrict the marketing of unhealthy foods can reduce the consumption of such foods among children. The effectiveness of the measure is expected to increase if it is broadly directed at the different media channels and is combined with other measures that promote healthy eating habits. Research also indicates that legislation is generally more effective than industry-wide agreements on self-regulation.

Our legal analysis shows that it could be possible to introduce a national ban on the marketing of unhealthy foods to children if it can be specifically justified on health grounds. At the same time, the analysis shows that too far-reaching a ban risks being assessed as disproportionate in relation to the basic principle of free movement in EU law. Our survey also indicates that few countries have introduced specific bans on marketing unhealthy foods to children. This entails that knowledge on the consequences for individuals and for society is limited.

One advantage of bans set by the industry itself is that they are relatively easy to design, administer and supervise

We have specifically analysed the draft law concerning a ban on the marketing of unhealthy foods to children that was produced by the Norwegian Government in 2012. The proposal was not adopted. Instead, the Norwegian food industry was given the opportunity to regulate such marketing itself. The self-regulation that has been designed in Norway has come about following a dialogue between the Government and the industry based on the assumption that Norway might legislate on the issue if this self-regulation does not produce results.

Agreements on bans within the industry are often relatively simple to design, administer and supervise in comparison to legislative bans. At the same time, the bans are based on voluntariness, which may limit their results. If not all companies adhere to the bans, the conditions will also be different for different companies.
Systematic work with self-regulation of the marketing of unhealthy foods for children should be able to provide the conditions for limiting children's exposure to such products. Such self-regulation would need to include clear guidelines regarding which marketing and which foods may not be marketed to children, as well as an organisation that assesses the marketing. Statskontoret is of the opinion that, among other things, collaboration between the central government and the industry, public awareness, and the legitimacy of self-regulation are of importance for the results that self-regulation can achieve. As self-regulation is often tried as an alternative to legislative regulation, there are also reasons for the central government and industry to jointly develop forms for an independent evaluation of the measure.

Areas that the central government, municipalities, industry and other actors can focus on in continued public health work

Statskontoret has identified some additional areas that the central government, municipalities, industry, the scientific community and other actors can focus on and monitor in the continued public health work with the marketing of foods to children. These potential areas of development concern the responsibilities of several actors, which should provide the conditions for dialogue and collaboration.

  • Better knowledge on the prevalence of marketing of unhealthy foods to children would improve the conditions for being able to more closely analyse and describe the problems and implement effective measures.
  • Children need to be able to employ a critical approach when they come into contact with marketing. This may justify measures that can promote children's ability to identify, understand, analyse and process marketing.
  • The relevant actors should monitor the results of restricting the marketing of unhealthy foods in the public domain. For example, the Mayor of London has recently decided not to grant advertising space for the marketing of unhealthy food and drink on public transport.
  • It may also be justified to analyse the possibility of working in various ways to promote the display in stores and at youth competitions, that can encourage healthy eating habits.