Taxman leading Asia's war on sugar

SINGAPORE - Sugary drinks in Indonesia were once the strange bedfellows of high-end cars and branded bags.

For four years, they sat in the same tax category, until complaints from drink makers feeling the pinch prompted the scrapping of the luxury goods tax on sweetened beverages in 2004.

But amid growing health concerns, a tax on these drinks could well make a comeback in Indonesia, one of the top five countries struggling with diabetes.

As the war on sugar heats up, soft drinks, and other beverages with high sugar content, have become the prime target of countries keen on slashing sugar consumption.

And in Southeast Asia, the taxman has emerged on the front lines of this fight in recent years.

The Philippines - where diabetes and cardiovascular disease are the cause of four in 10 deaths - rang in the new year with higher taxes of about six pesos ($0.12) to 12 pesos per liter on sweetened beverages. A 2 liter bottle of Coke costs about 61 pesos.

There were similar moves by Brunei and Thailand last year.

Asia is suffering from a double whammy of soaring obesity and diabetes rates. The World Health Organization estimates that nearly half of the children under 5 in Asia are overweight or obese, and half the adults have diabetes.

Sugar-sweetened drinks are a key source of sugar consumption in the region, said Katrin Engelhardt, the technical lead for nutrition in the WHO's regional office for the Western Pacific. Asia's growing economies have emerged as a key market for the food and beverage industry.

The WHO in 2016 called for countries to tax sugary drinks. But results in countries that have done so have been mixed.

After Mexico imposed a sugar tax in 2014, a study found that purchases of these drinks had dropped by an average of 7.6 percent over two years. More than two in three Mexicans are overweight.

But Denmark abolished its decadesold soft drink tax the same year Mexico introduced one. This was after an annual loss of about 290 million krone ($47.66 million) to illegal soft drink sales. Danes also visited neighboring countries like Sweden to buy cheaper fizzy drinks.

The Straits Times/ann