Beverage manufacturers in Singapore are bracing for tougher challenges, when the Ministry of Health (MOH) announced in December that it is now considering several measures to reduce Singaporeans' intake of sugar-sweetened beverages, from introducing sugar tax to a complete ban for higher-sugar sweetened beverages.
MOH is currently conducting surveys until 25 January to seek public opinion before making its decision. MOH is also considering plan to introduce front-of-pack nutrition labels and more stringent advertising regulations to curtail sugary drink consumption.
Singapore will not be the only country in ASEAN that impose sugar related tax on soft drink as other neighbours like Thailand, Philippines and recently, Malaysia have already started to impose their own tax versions. Complete ban on high-sugar drinks, however, is something new and Singapore will be the first country to introduce such stern measure.
The objective of sugar tax is to encourage manufacturers to reformulate their products and to encourage consumers to choose healthier drinks. Manufacturers however did not take the news positively. A spokesperson from Coca-Cola Singapore said that there are more effective ways to address diabetes and obesity rather than taxes that specifically target beverage manufacturers. In fact, many beverage manufacturers in Singapore have already taken measures to reduce sugar contents in their drinks. Prior to this, Coca-Cola Singapore has already made a commitment to not have drinks with more than 12% sugar in its range of sugar-sweetened beverages by 2020. It has so far launched a handful of lower-and no-sugar drinks, including Coca-Cola Stevia and Authentic Tea House, a new line of ready-to-drink teas.
The proposed ban on higher-sugar packaged drinks is also not well-received. These drinks include those that contain 5.5 teaspoons or more per 250ml serving. Those effected will include energy drinks and soft drinks. At present, Singapore already bans drinks that contain more than 3 teaspoons of sugar per 250ml serving on schools and government premises.
The proposed regulation also has its limitations, and will not serve its purpose effectively. This is because the proposed sugar tax will only cover pre-packaged drinks, but exclude drinks that are made by shops, stalls or hawker centres. As such, freshly made coffess, teas, bubble teas and other drinks from hawkers will be exempted. A large proportion of Singaporeans take such drinks out-of-home.
The imposition of sugar tax will certainly increase the cost of production to manufacturers, and MOH leaves it up to them to decide on whether to pass the cost to the end-consumers. With aggressive competition in this segment, it is very likely that manufacturers will opt to reformulate their drinks to bring down sugar level instead of bearing the higher cost. Even if the manufacturers decide to increase their prices, consumers could make that switch to drinks containing less sugar.
MOH defended its proposal to impose tax on sugar-sweetened beverages as research has shown that they are the highest and most significant source of sugar intake among Singaporeans.
Meanwhile, a recent survey conducted by ST online poll found that 40% of 1,900 people polled expressed their support for a total ban on pre-packed high-sugar drinks. About 30% of them supported mandatory front-of-pack labelling on high-sugar drinks.
In a related development, neighboring Malaysia will be imposing an excise tax of RM$0.40 per litre on manufactured "sugar sweetened beverages" with effect from April 2019. Dubbed "sugar tax", it will be imposed on non-alcoholic beverages with added sugar exceeding 5g per 100ml, and on fruit or vegetable juices containing added sugar of over 12g per 100ml.
This decision came after Budget 2019 was announced by the parliament late last year.