Thailand introduces sugary drinks tax to combat obesity, diabetes

Originally aired on Channel NewsAsia on September 16, 2017

If you have been to Thailand then you know we like things sweet - way too sweet sometimes. The Thai government has thus introduced a tax on sugary drinks, effective since Sep 16. Will this help Thais kick their habit or will it just turn people sour? 

TRANSCRIPT

On a typical hot and humid day here in Bangkok, a cold drink is often a refreshing relief. For some, good old water is enough. But for many others, they need a bit of a sugar rush to beat the heat.

And people here do love their sweet stuff - too much actually, according to health statistics. On average, Thais consume 28 teaspoons of sugar - more than double the recommended amount by the World Health Organization. 

And that limit can be easily reached by a can of soda. This can contribute to serious health problems as 32% of the population are overweight and 10% are suffering from diabetes - according to health officials, the numbers keep growing.

"We detect a continuous rise of [diabetes] patients," warns Dr. Sumanee Watcharasint from the Thai Bureau of Non-Communicable Diseases, "This past year, we have 600,000 new cases - that is the third-highest rate in Asia. And this also costs the state more in health care [for these patients]," 

In order to bring this under control, Thai officials are looking to tax drinks based on their sugar content.

Now how exactly is this tax being implemented? In a nutshell, the sweeter the drink, the more tax the manufacturer pays. 

So if a beverage contains between 6 and 10 grams of sugar per 100 milliliters, you’re looking at a 20 percent sugar tax. Drinks that have more sugar than that will be subject to a 25 per cent tax.

Here are a few examples:

A little brown bottle of energy drink contains 28 grams of sugar or 7 teaspoons – enough to give you a rush and it actually says on the label not to drink more than two of these a day.

Then we have a bottle of cola. This contains 55 grams of sugar - or about 14 teaspoons. Drink one of these and you’ve maxed out your sugar quota for the day, which is 12 teaspoons, according to the World Health Organization.

And by the way, if you’re wondering - diet versions or other artificially sweetened drinks are exempt from the tax.

Green tea drinks - very popular in Thailand – are also being hit by the tax. This one here contains 6 teaspoons of sugar, which means a tax of 25 percent.

How much more expensive are these drinks going to be, how hard will it hit sugar lovers? Well, in the first two years, the hike will be minimal. Less than a baht [holds up a 1-baht coin] or 3 US cents at most, in order to give companies and consumers time to adapt.

But after the two-year grace period, if manufacturers don’t cut down on the sweet stuff, the government could double the amount of sugar tax to be paid.

Channel NewsAsia tried to contact major Thai beverage companies. However, they have not replied to our requests. But according to excise officials, the industry is not turning sour over the tax.

"Actually, they responded quite well," says Nutthakorn Utensute, the director of the Excise Department's Tax Planning Bureau, "Because we have a grace period of two years, so they can reformulate their products and they’re using another sort of non-tax measure to encourage people to drink [beverages] with less sugar."

It remains to be seen if the tax will actually help Thais can kick the habit of consuming too much sweet drinks or if a price hike will leave a bad taste in their mouths.

Saksith Saiyasombut, Channel NewsAsia, Bangkok