The soft drink megabrand Coca-Cola announced in June last year that its Coke Zero product would be phased out, and as of September 2018 will no longer be available for purchase in stores. The decision, according to Coca-Cola Australia’s Marketing Director Lucie Austin was underpinned by overwhelming market research that showcased people greatly preferred both the taste and appeal of the new No Sugar product which was rolled out in 2017. Austin claims that the culmination of both a carefully revised formula that makes Coke No Sugar taste even more like classic Coca-Cola and a revised marketing campaign that successfully appealed to health conscientious consumers are the prime reasons No Sugar sales have significantly outstripped Coke Zero.
Internal studies conducted by Coca-Cola revealed that only 41% of Coca-Cola consumers associated Coke Zero with having zero sugar and only 7% associated it with a great taste reminiscent of that of classic Coca-Cola. Coca-Cola recognised the importance of developing a product that was widely recognised as being sugar-free in order to combat growing health awareness among Australian consumers and the damning statistics concerning Australia’s exponentially growing obesity problem.
The re-evolution of Coca-Cola’s sugar-free beverage showcases the current trend among the Australian confectionary industry to broaden the sugar-free options available for consumers as an attempt to meet the demand for healthy, non-sugary products as well as to mitigate any potential losses of a sugar tax. Clearly, Coca-Cola has recognised this shift in consumer preference for healthier, non-sugary beverage alternatives, and with the assistance of the Australian Beverages, Council has created a pledge to reduce sugar across a host of firms (Asahi Breweries, Frucor Suntory- V, Up&Go) products by 20% before 2025. In the last two years, Coca-Cola Amatil (CCL- an ASX-listed company that is 30 per cent owned by the Coca-Cola Company, that bottles and sells its products in Australia) has cut sugar on 22 products sold in Australia, including lowering the amount of sugar in Lift by 23%. CCL’s chief executive Alison Watkins claims that CCL is lowering its sugar content in its products as a response to increased consumer health awareness as well as an attempt to combat the exponentially increasing obesity rates in Australia, and not as preparation for an impending sugar tax.
CCL’s efforts may, however, be redundant as Australia’s obesity epidemic has opened up the possibility of a sugar tax that would potentially entail a 20% increase in prices for products that contain sugar. The proposition of a sugar tax stems from Australia’s exponentially rising obesity levels, with an estimated cost of $8.6 billion on direct and indirect obesity-related health costs during 2011- 2012. The Australian Institute of Health and Welfare states that in 2015 almost 2 in 3 Australians were overweight and that with 28% of the Australian population being deemed as obese, Australia is officially one of the fattest nations in the world.
Despite these damning obesity statistics, will the implementation of a fat or sugar tax be able to successfully eliminate this rather large problem? CCL argues that introducing a new tax into an already heavily taxed environment would be ineffectual, regressive and damaging to the Australian economy. CCL alludes to the fact that 3 of the 4 top selling soft drinks are no or low calorie, and hence concludes that a tax on sugary beverages would be an inept attempt at solving Australia’s obesity crisis.
Furthermore, a report conducted by a reputable global consulting firm, McKinsey, analysed the different approaches governments can implement to reduce sugar consumption and concluded that education on effective portion control and clear concise labelling of food products were far superior mechanisms to a sugar tax.
There is no doubt that tackling the issue of growing obesity within the Australian population should be of utmost importance to the Australian government, however, it is unclear whether the implementation of a “Sugar Tax” would be effective in reducing the burden obesity has on the Australian economy. The McKinsey report advocates that there is no simple fix to the complex issue of rising obesity within the western world, and hence suggests a multifaceted intricate response prioritising increased education and awareness over the implementation of an inept and ineffectual Sugar Tax.