Soft drinks tax cut alert – E24

– Soda is better than the one with sugar. I know there is a myth that it is not so good to drink soda, but it is wrong. If the alternative is to drink sugary sodas, then sodas are much better, says Health Minister Bent Høie (H) to E24.

In the revised budget, Frp reversed the famous budget deal in 2017, which ended with an increase of more than 40 percent in the sugar tax.

But the food industry has also criticized the government for the sugar tax that also affects products that do not contain sugar, and both the Health and Agriculture ministers will do something about it in the next budget, which will be presented on 7 October.

The change means that the more sugar there is in the drink, the higher the fee you will have to pay. If the drink has only artificial sweeteners, it means a 30 percent reduction in the sugar tax effective July 1 of next year.

– The industry has always demanded a scheme where the sugar tax does not affect sugar-free products, why does this only come now?

– We have had a public study and now we have received a solution that makes it cheaper to produce without sugar, but also an incentive for the food industry to make products with less sugar, says Høie.

The proposal is estimated to result in an accounting loss of revenue in 2021 of approximately NOK 150 million, but the full-year effect is estimated at NOK 350 million.

Today, producers have to pay NOK 3.63 per liter in sugar taxes. The government will change this to NOK 2.54 per liter for the sugar-free variant.

Brussels sales skyrocketed during the crown crisis

– I, who have accumulated a lot of fat over the years, know that sugar is one of our biggest health challenges. Making an incentive to use less sugar in products is better for those who produce the drink, better for us who are going to buy and for public health, says Minister of Food and Agriculture Olaug Bollestad (KrF).

Several companies have said that the willingness to invest is lower when rates are increased. Coca-Cola, among other things, pointed to the sugar tax when the company cut 42 man-years in November last year.

– Is the industry expected to also show willingness to invest now that tariffs are eased?

– I understand that the industry should have something in the background, but for us the most important thing is that people buy more products without sugar, says Bollestad.

Soda is one of the much cheaper products in Sweden and is often referred to as a “decoy” for Norwegians to cross the border. 2020 figures from the Breweries and Beverages Association show that soda sales growth in Norway so far this year is 14.8% now that the border is closed.

Thus, it is heading for the best year for soft drink sales since electronic registration began in 2010. The proportion of sugar-free soft drinks is now 60.7%, a figure that has been slowly but surely increasing.

Here’s how soft drinks and non-alcoholic beverages will be taxed based on the amount of sugar in the product:

Public health measures, not borderline measures

Companies that produce and sell beverages in Norway have also pointed to the increase in cross-border trade as a reason to do something about the sugar tax.

Furthermore, only a few weeks have passed since the Conservative Party’s program committee agreed to “carefully harmonize” the taxes on soft drinks and alcohol with Sweden.

– Is it a Høie meeting with your program committee?

– For me, the public health measure is the most important thing, but there are many who go to Sweden to buy soft drinks. These products are now experiencing quite steep price drops and we hope that this will help people buy more in Norway. So there are both, but the reason is public health, says the Minister of Health.

– When taxes on sugar were established, this was considered a public health measure. Now is it also considered a public health measure to lower them again?

– Something happened in the negotiations at the Storting, but now we show that you can have public health measures that involve tax cuts and not just increases.

Thaw frozen relationships with the food industry

In 2014, Bent Høie started the so-called business group where the Minister of Health had regular meetings with the food industry to work together for less sugar in Norwegian foods. This cooperation quickly came to a halt when the government increased the sugar tax.

– Now we want to start the collaboration with the industry that was paralyzed after the tax increase in 2017, and after the adjustment that came this summer, the signal is that the industry wants this too.

Among other things, the government has looked to Ireland for inspiration for the proposal, which has introduced similar measures.

Both Høie and Bollestad say they want to avoid measures taken in the UK, where, for example, they have introduced a ban on offers such as “buy one get one free” on unhealthy products.

In Norway, the government believes that dialogue works better than prohibition.