The World Health Organization (WHO) has recently unveiled new fiscal policy guidelines designed to promote healthier diets on a global scale. These guidelines advocate the use of fiscal measures such as taxes and subsidies to shape consumer behavior and encourage healthier eating habits. They aim to address the pervasive availability and marketing of energy-dense, nutrient-poor foods that contribute to global health challenges.
WHO underscores the potential of fiscal policies to influence market dynamics and consumer choices by adjusting the affordability of products. The report highlights subsidies as a means to stimulate consumption of nutritious foods, while taxes can discourage the consumption of products detrimental to health and incentivize industry reformulation.
WHO acknowledges global efforts, such as the taxation of sugar-sweetened beverages, as initial steps towards fostering healthier dietary patterns. Despite progress, challenges persist in crafting fiscal policies that effectively promote public health. The guidelines serve as a comprehensive resource for WHO member states, aiming to facilitate the establishment of food environments conducive to better health outcomes.
Key Recommendations and Objectives
The guidelines aim to provide evidence-based advice for national and local policymakers involved in food regulation and health and nutrition programs. The recommendations focus on using fiscal policies to create healthier food environments.
Key Elements of the WHO Fiscal Policy Guidelines:
1.Taxation on Unhealthy Foods:
- Sugar-Sweetened Beverages (SSBs): Increased taxes on SSBs to reduce consumption.
- High-Fat, High-Sugar, and High-Salt Foods: Similar tax measures on foods with excessive amounts of fats, sugars, and salts.
2.Subsidies for Healthier Options:
- Fruits and Vegetables: Subsidies to lower prices and make them more accessible.
- Whole Grains and Lean Proteins: Financial incentives to promote the purchase of healthier food items.
3.Regulation of Marketing and Advertising:
- Targeting Children: Restrictions on marketing unhealthy foods to children.
- Nutritional Labeling: Clear and informative labeling to help consumers make better choices.
4.Public Awareness Campaigns:
- Education: Initiatives to educate the public about the benefits of healthy eating.
- Community Programs: Local programs to support dietary changes and healthier lifestyles
Evidence Supporting Fiscal Policies: The guidelines are supported by existing evidence on the effectiveness of taxes and subsidies. A systematic review conducted by WHO found a significant impact of sugar-sweetened beverage (SSB) taxes on prices and purchases. For example, meta-analyses show that an 82% passthrough rate of SSB taxes to consumer prices leads to a significant decrease in the purchase of these beverages, with an own-price elasticity of -1.59, indicating that a 10% tax increase would reduce SSB purchases by about 16%.
Global Examples and Impact
1.United Kingdom: The introduction of the soft drinks industry levy has decreased the obesity rate among primary school students.
2.Germany: Similar SSB taxation could potentially save billions in healthcare costs by improving public health.
3.Food Foundation Report: A UK-based report shows that switching to products lower in salt and sugar positively affects affordability, health, healthy weight, and the environment.
4.Low- and Middle-Income Countries: The rise in availability of ultra-processed foods high in sugar, salt, and fats has led to increasing rates of overweight and obesity in these regions.
The food industry should be actively developing adaptation strategies in response to fiscal policy guidelines from the WHO. These strategies should aim to align with the WHO’s recommendations, focusing on enhancing nutritional value, reducing sugar and salt content, and improving labelling transparency. Industry leaders should also be exploring innovative approaches to product reformulation and portion control to promote healthier choices among consumers. Any proactive response underscores a growing commitment to public health and sustainable business practices within the food sector.
Potential Impacts on the Food Industry:
1.Reformulation of Products:
- Reduction of Sugar, Fat, and Salt: Manufacturers may reformulate products to reduce these ingredients to avoid higher taxes.
- Innovation: Development of new, healthier products to meet consumer demand and comply with guidelines.
2.Price Adjustments:
- Higher Prices for Unhealthy Foods: Consumers may face increased costs for unhealthy food options, leading to decreased sales.
- Competitive Pricing for Healthy Foods: Subsidies could make healthier options more competitively priced, boosting their market share.
3.Marketing Strategies:
- Health-Focused Branding: Companies might shift towards health-focused marketing strategies to align with new regulations.
- Transparency in Advertising: More transparent and informative advertising practices, especially regarding nutritional content.
4.Supply Chain Adjustments:
- Sourcing Healthier Ingredients: Changes in supply chains to source healthier ingredients and comply with new standards.
- Collaboration with Farmers: Increased collaboration with agricultural sectors to promote the production of healthier food ingredients.
5.Economic Implications:
- Revenue Shifts: Potential shifts in revenue from taxed unhealthy products to subsidized healthier products.
- Market Dynamics: Changes in market dynamics as consumers adapt to new pricing and product availability.
6.Corporate Social Responsibility (CSR):
- Enhanced CSR Initiatives: Companies may enhance their CSR initiatives to promote public health and align with WHO guidelines.
- Partnerships and Alliances: Collaborations with public health organizations and governments to support healthier dietary practices.
Challenges and Considerations:
- Consumer Behaviour: Changing deeply ingrained eating habits may take time and require sustained effort.
- Industry Resistance: Some sectors of the food industry may resist changes due to potential profit losses.
- Equity and Access: Ensuring all socioeconomic groups benefit from these policies and have access to affordable, healthy food options.
- Monitoring and Evaluation: Continuous monitoring and evaluation to measure the effectiveness of these policies and make necessary adjustments.
Overall, the new WHO fiscal policy guidelines aim to create a healthier global population by leveraging economic tools to influence dietary habits. The food industry will need to adapt to these changes, potentially leading to significant shifts in product offerings, marketing strategies, and overall business operations.
For more information on the Fiscal policies to promote healthy diets: WHO guideline.
https://www.who.int/publications/i/item/9789240091016
