Using Chile’s warning label criteria to tax foods and drinks: Potential effects on prices, purchases, and revenues

In a new study published in PLOS ONE, Drs. Arantxa Colchero, Guillermo Paraje, and Barry Popkin explore the possible impacts of a Chilean tax levied on products that currently carry warning labels and other regulation under the Law of Food Labeling and Advertising. The country has had a sugary drink tax in place since 2014, but it uses different sugar thresholds than the warning label law to determine which products will be regulated:

2014 Beverage Tax Law

Sugar content thresholds

For all non-alcoholic drinks with with coloring, flavoring, or caloric sweeteners:

  • 18% ad valorem tax on drinks with >6.25 g sugar/100 mL (+5% from previous 13% rate)
  • 10% ad valorem tax on drinks with ≤6.25 g sugar/100 mL (–3% from previous 13% rate)

2016 Law of Food Labeling and Advertising

Nutrient profiling model

FoodsLiquids
Energy (calories per 100 g or mL)27570
Sodium (mg per 100 g or mL)400100
Total sugars (g per 100 g or mL)105
Saturated fat (g per 100 g or mL)43

In the study, Colchero, Paraje, and Popkin simulated a tax on foods and drinks using the more comprehensive nutrient profiling model and found that taxing products with warning labels — i.e., ultra-processed junk foods and sugary drinks — would likely lead to significant drops in purchases of these products. The authors’ findings also suggest potential for raising substantial revenue, which could in turn be used to fund health or other welfare-related expenditures.

This simulation has implications beyond Chile: Any country that has implemented or is considering adopting nutrition-related policies such as front-of-package warning labels, marketing restrictions, school food environment regulations, or taxes could benefit from aligning these policies around a single, robust nutrient profiling model that identifies the least healthy foods and beverages.

Implementing mutually reinforcing policies such as these that discourage purchase and consumption of unhealthy while also raising revenue that can fund health-promoting interventions has great potential to prevent and reduce obesity and other noncommunicable diseases.


Read the full article in PLOS ONE.

AUTHORS:

Arantxa Colchero headshot
Arantxa Colchero, PhD
Guillermo Paraje, PhD
Barry Popkin square thumbnail
Barry Popkin, PhD

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