Evaluation of South Africa’s excise tax on sugar-sweetened beverages

Non-communicable diseases, which contribute significantly to South Africa’s disease burden, are largely driven by obesity and associated illnesses. Obesity prevalence has increased by 30% over the last decade, while consumption of energy-dense, ultra-processed foods and beverages has grown substantially, with sales of sugar-sweetened beverages increasing by more than 50%. Recognizing the growing severity of this epidemic, the government has devised an obesity prevention strategy, which includes a recently announced excise tax on sugar-sweetened beverages.

Despite growing evidence that such taxation is effective in reducing consumption in developing country settings, interested stakeholders have argued that the tax will not be effective and will impose an undue burden on businesses in South Africa. The effective and continued implementation of this tax to achieve optimal health gains will thus hinge on whether or not its effect on consumption is monitored and its impact is demonstrable.

The project will undertake a holistic assessment of the effects of this novel policy in South Africa. It will adopt a four-pronged approach, which will document and investigate the socioeconomic context justifying the need for sugar-sweetened beverage taxation and other obesity-prevention efforts; the consumers’ response to the tax; the producers’ response to the tax; and the health and financial risk protection impacts of the tax across different levels of income.

The project will be a multi-disciplinary effort incorporating both quantitative and qualitative methods such as econometric studies, surveys, and in-depth interviews. The project will produce relevant knowledge for multiple sectors of government and society. It will help to build the emerging knowledge base on the effectiveness of taxation policies for non-communicable disease prevention in low- and middle-income countries.

Project ID

108424

Project status

Active

Duration

36 months

IDRC Officer

Natacha Lecours

Total funding

CA$ 1,022,900

Countries

South of Sahara

Program

Food, Environment, and Health

Project Leader

Karen Hofman

Institution

Wits Health Consortium (Proprietary) Ltd.

Institution Country

South Africa

Institution Website

http://www.whc.co.za