Taxing fizzy drinks and fatty foods and subsidising fruit and vegetables could have significant health benefits for New Zealanders, a local study has shown.

Researchers from the Universities of Otago and Auckland examined the relationship between food pricing, consumption and non-communicable diseases like cardiovascular disease and diabetes in their study, published in PLOS magazine.

The study, which analysed data from 32 high-income countries, predicted that for every 1 per cent price increase, there would be an overall decrease of 0.02 per cent in energy intake from saturated fat.

Similarly, a 10 per cent hike in the price of soft drinks could decrease consumption by up to 24 per cent, the research found.


Dropping the price of fruit and vegetables would work the other way with a 10 per cent decrease potentially increasing consumption by up to eight per cent.

However, researchers did find that subsidies like this could work adversely with people making compensatory purchases - buying less of other healthy products like fish and buying unhealthy supplements like sugar.

The researchers also found that food pricing strategies would be more effective in improving the health of lower socio-economic groups, suggesting potential for a reduction in inequalities.

Lead researcher Helen Eyles says despite the fact that food taxes impact lower income groups the most, these groups are also the most price sensitive.

"[Lower income groups] are most likely to change their food purchasing habits based on a food tax or a subsidy and what our research showed was that, because of the price sensitivity, the health impacts might be relatively greater for lower income groups than higher income groups."

She says the role of scientists is to present "the best evidence possible" for political debate.

"It's really important to look at a range of different interventions for improving population diets and this is one that shows promise."

But additional research into the long-term health incomes for different socio-economic groups is still needed, she says.

Professor Elaine Rush from the Faculty of Health and Environmental Science agrees that more research is needed but instead challenged food producers, manufacturers and retailers to "improve the availability, cost, and formulation of foods and use their considerable marketing skills to drive a change to the food supply now".

"There is no shortage of nutritious food but it does not get to the mouths of those most in need," she says.

"We know eating whole fruit and vegetables, protein, dairy products and whole grains improves health and productivity and the earlier in life the bigger the potential improvement."

The University of Auckland's Professor Boyd Swinburn, of the Population Nutrition and Global Health department, also argues that the diet of the population is highly dependent on the price of food.

"The contribution of unhealthy diets to ill health in New Zealand is now greater than that of tobacco, so improving diets needs to be taken far more seriously than it is at present," he says.

Swinburn says the "two most promising strategies" for New Zealand would be to follow Australia's lead in removing the GST on fruit and vegetables, and to introduce an
excise tax to drinks that are high in sugar.

But other experts have expressed concerns about how realistic administering the taxes would be.

"Taxes and subsidies to encourage healthy eating are notoriously difficult to administer in the real world. They're the kind of thing that sounds simple, but wind up being a bit of a compliance nightmare," says Dr Eric Crampton from the University of Canterbury.

He points out, Denmark recently abandoned its fat tax after just one year after because of the administrative burden it placed on Danish firms.