Lower-income households that spend a significant proportion of their income on soda as a source of cheap energy and treats will also be hit by the tax, said the research body’s CEO Azrul Mohd Khalib.
He said studies and the experience from countries which have already implemented this measure, such as Chile, Mexico and the United Kingdom, have indicated that a soda tax will have both short-term and long-term effects.
“Short-term, young consumers (between 13-30 years) across different socio-economic backgrounds would very likely reduce their sugar consumption by up to 80% compared to the average consumer, turning to beverages which are less sweet.
“Older individuals and those who already have high-sugar diets are unlikely to change habits as they already have strong preferences for sugar and are relatively insensitive to price increases.
“In the long term, the situation will normalise and consumers may very well end up buying the same amount of soda drinks but paying more,” he said.
He was commenting on a statement by Prime Minister Dr Mahathir Mohamad, who said the government is considering implementing a soda tax to encourage healthy living and reduce sugar consumption, which is a cause of diabetes.
Azrul said the tax may succeed in achieving large reductions in sugar among one specific group, but will do very little for the larger group.
“If they switch to or increase consumption of sugar-sweetened beverages such as teh tarik or kopi susu, then the gains are potentially lost.
“The effectiveness of a soda tax on actually reducing obesity is therefore mixed,” he said.
He also said that businesses, particularly small ones such as coffee and sundry shops, will be negatively affected in the short term but will probably adjust and recover later after the increased cost is normalised.
Azrul proposed that the tax be applied to manufacturers and not at the point of retail, which is similar to how it is done in the UK.
He said drinks with more than a certain gramme of sugar per 100ml should face a specified tax rate per litre.
“This would have the intended result of manufacturers taking the initiative and being incentivised to reduce the sugar content in their products to avoid being taxed.
“The revenue collected could go towards the funding of health programmes designed to deal with non-communicable diseases (NCD), specifically diabetes and risk factors such as obesity.”
He said a tax by itself would not solve the obesity problem, as soda drinks were not the only contributor to obesity.
The government must invest in health literacy and NCD prevention programmes which aim to educate and create awareness of healthy choices and influence behaviour.