SA’s future sugar tax plans could potentially be penned by its dominant sugar industry

Meet Task Team 7.

They’re one of the groups set up as part of a 10-year plan to keep South Africa’s sugar industry afloat while it weathers a “perfect storm” of threats to its business. These hazards, it claims, include cheap sugar crowding out sales at home and abroad — and the sugar tax.

The sugar tax, or the Health Promotion Levy (HPL), is a fee that manufacturers pay for every gram of sugar per 100 ml (currently 2.1c). The first four grams aren’t taxed.

The levy isn’t a big money maker for the government, just 0.1% of estimated income for 2024/2025, but revenue isn’t its main goal. It’s one of a number of public health policies written to cut people’s sugar, salt and saturated fat intake and ultimately reduce cases of heart disease, diabetes and cancer, which caused half of all deaths in the country in 2019.

Initially, research showed the tax was working, despite industry opposition leading to the tax rate being cut in half. A later study suggested it was no longer enough to have an impact on soda purchases. The levy also hasn’t kept up with inflation and was frozen in 2020 to allow the sugar industry to enact their rescue plan, which describes a switch from refined sugar to sweeteners and biofuel.

Task Team 7’s job is to come up with a sugar tax plan that allows the industry to pivot despite what it claims are existential threats posed in part by the drop in sugar demand that followed the HPL.

The problem is that Task Team 7 is riddled with conflicts of interest.

According to the sugar rescue plan, they’re likely dominated by the same businesses that went to extreme lengths to oppose the sugar tax from the start, including the Beverage Association of South Africa (Bevsa) which represents soda giants including Coca-Cola.

An analysis of written submissions to the Treasury found Bevsa and Coca-Cola misled the government with a litany of bad bookkeeping, cherry picked data, and other falsehoods. Taken together, they suggested the HPL wouldn’t achieve its health goals and would instead create a nightmarish social and economic reality that could include tens of thousands of job losses, poverty, a lower tax take, fewer international investors and credit downgrades, to name a few. Bevsa said it was unable to comment on these allegations.

The task team is monitored by an oversight committee, but it’s made up of even more industry leaders and two ministers whose departments seldom oppose industry:  trade (Ebrahim Patel) and agriculture (Thoko Didiza). The ministers are the only government committee members authorised to speak with the press. Patel’s department wouldn’t name the individuals serving on the monitoring team and Didiza’s didn’t respond.

Simply put, the same people who wrote the rescue plan (without civil society input) are executing it and monitoring themselves.

Let sleeping watchdogs lie

Task Team 7’s work is unfolding in secrecy, and fleeing watchdogs only add to the mystery.

The national health department is listed as an observer to the sugar rescue plan. But spokesperson Foster Mohale says his department bowed out when it became clear that the sugar plan’s goals clashed with their own target to bring down diabetes and heart disease linked deaths by 25% in the next three years.

The health department is far from innocent though. It holds regular meetings with the food industry which civil society and researchers are banned from attending, Daily Maverick reported in 2021.

The Department of Trade, Industry and Competition (DTIC) says it still involves the health department when public health issues come up.

The country’s anti-trust regulator’s powers are diminished too. Talks held as part of phase one of the sugar plan, which ended in March 2023, were exempt from some parts of the country’s anti-collusion laws (though not totally immune to them).

The concession came with a list of 19 conditions, including that all meetings must be recorded and sent to the Competition Commission. At the time of publishing, spokesperson Siyabulela Makunga was waiting for the South African Sugar Asscation (Sasa) to say whether he can disclose any information including whether the Commission received the recordings. Sasa told Daily Maverick information related to the masterplan is confidential.

Nobody else Daily Maverick spoke with would name those who serve on Task Team 7, who showed up to meetings or what they discussed.

Three strikes, not out?

None of this is illegal. But it’s part of a problem that public health activists have long complained about: that the industry’s lobbying amounts to interference.

It’s not that government officials are necessarily taking bribes, rather that the industry makes a concerted effort to delay or dilute regulations on their business, or to dispute their scientific merit, according to Sameera Mahomedy. She’s a senior researcher at Priceless, a health economics unit at the University of the Witwatersrand.

There are three recent examples of this.

One. Meetings with the National Treasury didn’t only halve the sugar tax rate from 20% to 10%, it also resulted in a major source of sugar, 100% fruit juice, being excluded from the tax. That’s according to 2021 research published in Obesity Reviews.  

Two. Draft salt regulations were leaked to industry and weakened as well.  Lastly, the Consumer Goods Council of South Africa (CGCSA), a Task Team 7 member, lobbied against strict warning labels on processed foods before draft regulations were available to the public. The CGCSA denied that it was exerting undue influence over the process, and they were unsuccessful anyway from the looks of the published draft regulations, which describe a more stringent type of warning than the industry usually prefers.

Trix Trikam, SASA’s executive director, rejects claims of interference, saying the characterisation is unfortunate given that the industry body’s submissions to government were in line with South Africa’s public participation laws.

But South Africa’s participatory policy process was intended to give the everyman — not lobby groups — a chance to raise their issues, says Petronell Kruger, the programme manager for the advocacy group the Healthy Living Alliance (Heala).

“Policymaking has skewed so far into a lobbying culture that government officials actually believe they’re breaking the law if they don’t consult companies such as Coca-Cola.”

The industry doesn’t deserve to be part of the policy making process, Kruger says. Company directors are fundamentally conflicted, she says, since they can be fired, fined or jailed if they do anything to the detriment of shareholders.

All in all, Kruger says industry involvement in talks about HPL has overshadowed the people that the policy was drawn up to protect.

“We haven’t heard nearly enough from people who are managing diabetes or parents who are worried about what their children eat.”

Government’s Big Food faction 

Plans to boost the quality of South Africans’ food and overall health are often undermined by a group that a 2018 Food Security study calls “the economic growth coalition”.

These allies are the DTIC, the Department of Agriculture, Fisheries and Forestry, as well as food manufacturers, farmers, marketers and retailers (you’ll also recognise them from the list of Task Team 7’s members and monitors).

They sing from the same hymn book when it comes to food policy, the researchers say. They say the upward trend of sugar, salt and fat intake in South Africa is the result of people’s uninformed personal choices, or a preference for “status foods”.  The problem will be partly solved if people had more money to spend on better food.

People’s paychecks are one of a host of factors that determine what food they buy. But research shows that people are still limited by the options available nearby. In a number of Gauteng’s poorest wards, for instance, fast food outlets are the only place people can buy food.

Regardless, the coalition’s influence over the country’s food policies is reinforced by the direct line of communication between industry and government departments, the researchers explain.

This allegiance, and the fact that the state sees these industries as a way to reach their jobs target (11 million jobs by 2030) generally leaves the other two coalitions — health and food security — in the dust.

While the industry and Treasury’s future meetings are formally written into the sugar masterplan, health activists at Heala have battled to secure a meeting with the Treasury. They only succeeded after submitting a request under the Promotion of Access to Information Act (Paia), Kruger says. The Treasury says health activists’ worries are unfounded because it hasn’t had any exclusive meetings with the sugar industry regarding the HPL.

It’s especially worrying in the lead up to 2025, when the sugar tax is set to be increased (to 2.31c) for the first time in half a decade. It’s a 10% increase but it would have to be pushed up to 2.43c to get to the 20% that public health experts are pushing for while also taking inflation into consideration, explains deputy director at Priceless, Sue Goldstein.

SA Canegrowers has already called the planned increase a “bad faith” move, likely because phase two of the sugar rescue plan discussions haven’t happened yet.

What next? 

From what Daily Maverick can gather, Task Team 7 is waiting for the results of an updated national nutrition and diet study to inform its future meetings.

The lead researcher of this study, dietician and nutritionist Rina Swart, says the report is undergoing final checks. A preliminary summary suggests that everyone in the country, regardless of their income, is eating and drinking much more of the sugars, salts and saturated fats that a new BMJ study linked to more than 30 diseases.

It’s unclear what kind of evidence will convince the industry that the food system needs to change, says Swart. She and others who work in this field see the dire health impacts of mass-marketed, easy-to-make super tasty food every day.

She says: “To be honest, I don’t know what kind of miracle the industry expects from this report.” DM

Joan van Dyk is an independent health journalist based in Johannesburg.