#NourishElectionAsks – Ask 4: A Retailers’ Levy

With just 3 weeks left until May 5th when Scotland elects its fifth Parliament, this week we’re focusing on our fourth policy ask: a Retailers’ Levy.

You can also have a look at all 6 Election Asks here, please use these asks to initiate conversations with candidates wherever the opportunity arises, and support Nourish to make sure that a fairer and more sustainable food system is a priority for the next Scottish Government.

What’s wrong?

Food poverty and the use of food banks are on the rise in Scotland. Simultaneously, obesity and overweight are widespread, especially in low-income households. Scotland has the third highest levels of obesity in OECD countries. But the public health issue related to food isn’t limited to expanding waists. People in Scotland and the UK have poor diets that jeopardise their health beyond just their weight. We eat too few micronutrients, fresh fruit and vegetables, and too many foods with negative health effects, such as highly processed foods, high sugar foods and foods with high saturated fat levels.

Approximately 2/3 of adults and 1/3 of children are overweight. Almost half of overweight people are obese.  This results in an annual cost to NHS Scotland of up to £600 million. The total economic costs of obesity is estimated between £0.9 billion and £4.6 billion per year. (SPICe briefing, Obesity in Scotland)

In their recent Force-Fed report, the Food Foundation found that “the diets of typical British families now pose the greatest threat to their health and survival”. In their analysis, none of the family members meet all seven dietary standards for food components that directly protect their health.

Experts estimate that such poor diets are linked to 30% of life years lost in disability, or even in early death. The Cabinet Office predict that 70,000 deaths could be avoided each year if UK diets matched nutritional guidelines on fresh fruit and vegetables. (Fabian Commission, A Recipe for Inequality)

The food we eat is making us sick.

It’s not just about sugar, it’s about our food environment

A fiscal measure such as the announced Sugar Tax is welcome, but insufficient. A sugar tax is a small change in the margins of our food system. It will slightly increase the price of some unhealthy, sugary drinks and send people the message that they should not be drinking too much coke. Obesity and malnutrition are not a small problem on the margins of our society.

The extent of the obesity and malnutrition problem in Scotland and the UK should make it clear to our policy-makers that the issue is not just down to the individual responsibility of people. Yet, all state-led action to tackle obesity continues to focus on consumers’ responsibility: organising information measures, trying to educate children, taxing sugary drinks… It is easy to blame consumers, but when the majority of the population makes the wrong choices, there is a pretty clear hint that something else must change; something more systemic. It is more the elephant in the room than a hint, really.

This ‘elephant’ was actually recognised by the Scottish Government in 2010:

Overweight and obesity cannot be tackled by just relying on individuals to change their behaviour (…). The evidence also suggests that the provision of health information, although important, is not sufficient and that to make the changes necessary we have to reshape our living environment from one that promotes weight gain to one that supports healthy choices.” SG (2010) Preventing Overweight and Obesity in Scotland: A Route Map Towards Healthy Weight.

This recognition opens the way for significant progress. Yet, little has been done to address the issue in a more fundamental way. With a malnutrition problem of such huge dimension, and an agri-food sector that is so powerful and reluctant to embrace real change, where can we possibly start with a “more fundamental” solution?!

How about we slightly change the rules of the game for large retailers and caterers? They create our collective food environment, providing us with the bulk of our shopping and most of our meals outside the home. The food on their shelves, the discounts and promotions they offer, as well as the multitude of marketing strategies they use influence the products we buy. This power should come with responsibility; the responsibility to help us meet the nutritional standards set for our nation. All the information and education measures the government could think of will not be any good if what is sold in our shops and restaurants makes it so difficult to meet the dietary standards for healthy lifestyles.

So how about a kind of tax that punishes large food retailers and caterers when they feed us badly, while giving them the leeway to make changes that will improve our diets and reduce their tax bill?

The case for a Retailers’ Levy

A Retailers’ Levy would tax the “health difference” between what we are sold and what we should be buying. This levy would require large retailers and caterers to report periodically on the nutritional composition of their sales. They would then pay a levy on the difference between their sales and the national dietary goals. For example, if the added sugar across the board of Supermarket A is 14% (current average) it would pay the levy on the difference between this and the official target (5%). This measure would include all important components of our food, so similar levies would be paid on the excess of saturated fat or of salt and the shortfall in fibre.

The two primary goals of a Retailers’ Levy are to

  • influence proportional food prices in favour of healthier foods
  • incentivise large retailers and caterers to promote healthier foods, both in what they decide to put on their shelves and in their marketing strategies

Distorted proportional food prices are a crucial cause of bad diets. Healthier foods are three times more expensive than junk foods as a source of dietary energy and the price difference is growing. A likely outcome of a Retailers’ Levy would be a small increase in the prices of foods containing high levels of sugar, fat, or salt while retailers would be incentivised to make fibre and vitamin rich foods more affordable.

The second goal outlined above – influence marketing strategies – is crucial. “The top seven food brands spend a combined ten times more on marketing than the entire budget of the government’s leading healthy eating campaign”, reported the Fabian Commission in A Recipe for Inequality. Further, the Commission refers to a 2009 study that found that 50 to 80% of food and drink marketing is aimed at low nutrition foods. The Retailers’ Levy would encourage retailers and caterers to align their marketing efforts with healthy dietary goals in order to reduce the tax they are required to pay.

Introducing a Retailers’ Levy would be a crucial step in enforcing the Right to Food in Scotland. Indeed, Olivier de Schutter, former Special Rapporteur to the UN on the Right to Food described one of the key responsibilities of states as “to fulfil the right to food by putting policies in place to ensure everyone has access to an ‘adequate diet’”.

Talking of adequate diets reminds us that it’s not just about calories. Of course calories matter. But, arguably, our exaggerated focus on feeding ourselves with calories has led to this epidemic of overweight and micronutrient deficiency. Many people buy less fruit and veg because they are more expensive per calorie than high fat foods.  An adequate diet is about good nutrition, not just sufficient calories. Therefore, an important side-goal of the Retailers’ Levy is to shift the focus from sugar and calories to the variety of food components (good and bad) and nutrition.

Finally, such a levy would be easy to assess and raise as the nutritional composition of all standard products is known. It partly shifts responsibility on to those who feed us to feed us better, and it aligns the interests of food business with the national interest that people source a healthier diet for themselves and their families.

While some argue that there is no such thing as an unhealthy food, there is, undeniably, such a thing as an unhealthy shopping basket. This levy changes the basket.

What next?

We are delighted that the idea of a Retailers’ Levy has gained some attention and traction in political circles in the run up to the Holyrood election. Of course, this is not a silver bullet that will on its own tackle obesity and malnutrition. Complementary policy instruments such as regulations and information measures will be needed and should be part of the debate about the Retailers’ Levy.

The specifics of the levy will be crucial for its success, therefore more in-depth research is needed. We welcome offers for research to look into the detailed shape a Retailers’ Levy could take.