In recent years, sugar has been the focus of a number of government health initiatives worldwide, with many countries adopting some form of soft drinks industry levy; or ‘sugar tax’. But it’s not just soft drinks that are the target of what is predominantly the West’s war against the sweet stuff; diet trendsetters the world over are advocating the avoidance of sugar in all of its processed forms.

Last year the UK Government announced the introduction of a 20% tax on sugar-sweetened beverages, set to take effect from April 2018, backed by the World Health Organisation (WHO).

The measures are the result of the guidance of the Scientific Advisory Committee on Nutrition (SACN), which advises Public Health England, among other governmental bodies, and has recommended that less than 5% of an adult’s diet should be made up of sugars added to processed foods, meaning that naturally occurring sugars in for example milk and fruit are largely acceptable. At present National Diet & Nutrition Survey figures indicate that the added sugars average for UK adults is 12.1%, with teenagers being even higher, with sugar making up 15.6% of their entire diet.

Supply, demand and diminishing reserves

While recommendations in the west are that we need to be cutting back on our daily sugar consumption, internationally sales remain strong. In fact, analysts from Informa Agribusiness Intelligence project that for the second consecutive year global sugar production will fall short of consumption, putting strains on international sugar stocks.

As reserves dwindle, numerous production and processing factors, namely domestic policy, cost of fuel for the running of equipment, and weather conditions will have an increasingly marked impact on the food market. “Last year the market was in deficit by 9 million tonnes, due mainly to weather effects that cut production across the world,” says Stefan Uhlenbrock, Informa Agribusiness Intelligence sugar forecast analyst. “This season it’s a little bit smaller, we currently put our 2016-17 deficit at 5.5 million tonnes. So between the two years you have a stock reduction of about 14.5 million tonnes, which is quite a significant amount, and this has of course been very supportive for world prices.”

"The large international purchasers of sugar can expect prices to continue to rise."

The cost for the everyday consumer should not be heavily affected though, as most domestic western markets are heavily protected from price changes – for the better or worse – as a result of high import tariffs. But the large international purchasers of sugar (such as Coca-cola and Nestlé) can expect prices to continue to rise until production catches up with demand. This, alongside the aforementioned proposed sugar tax tariffs could be behind the current trend of reformulation of food and drinks products by big business.

“Several big companies have announced that they want to increase the amount of their products that are lower in calories in response to obesity problems and the obesity debate,” explains Uhlenbrock, “Coca cola and Pepsi are a prime example. The latest addition in the product line-up is of course soft drinks with the stevia sweetener.”

“We haven't yet seen an effect on the overall consumption level as these are things that are only recently gaining momentum… but this could have an affect according to my view. If these measures take place on a broader scale and if consumers accept the changes.”

The sugar tax implementation experimentation

While sugar consumption levels are expected to drop in the UK following the implementation of the sugar tax, evidence can be cited that as suggests that this may not necessarily be the case in the medium-to-long term. Mexico introduced a 10% tax on sugary drinks in 2014, to much applause internationally, however Uhlenbrock reports that while initial figures show a drop in consumption, as time goes on this might not be the case.

“If you look at the first two quarters or so after the introduction, it’s quite natural because if there is an announced price increase then people always stock up ahead of the implementation of such a measure…so if you look at the first quarter then you can easily see a measureable effect.”

“But what has been seen over the longer term is that there has been almost a normalisation. There is no noticeable effect on consumption levels in terms of Mexican sugar consumption. We are now at an even higher level than before.”

So, does this spell disaster for push towards lower consumption levels in other Western states? Potentially. The key drivers for increased sugar use are economic and population growth, so as the world gets ever more crowded and interconnected we can expect sugar to be stronger than ever. The big question appears to be whether the global population is ready to accept less sugar in their goods, or whether it’ll leave a bitter taste in their mouths.