Reilly sought 20% tax on sugary drinks in Budget, records show

Minister for Finance Michael Noonan faced down demands by Minister for Health James Reilly for a 20 per cent tax on sugary drinks in budget talks last autumn, records reveal.

Documents released by the Department of Finance also show Dr Reilly sought far bigger increases in the price of tobacco and alcohol than those eventually introduced by the Government.

Dr Reilly wrote to Mr Noonan on October 9th, 2013 – six days before the budget – to propose a levy on sugar-sweetened drinks. Such a measure would find public support as polls suggested people believed children and young people drink too many such drinks, he argued.

In his letter, released under the Freedom of Information Act, the Minister for Health also cast the proposal as part of the effort to confront childhood obesity and its consequences for adults.

'Obesity costs'
"Obesity in adults in Ireland costs €1.13 billion per annum and that is not including the cost of obesity in children as no figures are currently available. However, we know that the recent Growing Up in Ireland survey found that one in four children are already overweight or obese by three years of age," Dr Reilly wrote.

He also said an official action group on obesity was finalising a report on measures to to restrict the availability of high fat, salt and sugar foods and drinks.

“One recommendation in this report is to impose a levy of 20 per cent on sugar-sweetened drinks given that the scientific evidence has become stronger over the past year. This proposal would reduce the consumption of sugar-sweetened drinks and generate significant income for the exchequer,” said Dr Reilly.

"I am therefore requesting that you introduce this as a key public health measure in the 2014 budget."

Cigarettes
Dr Reilly did not estimate the State's potential revenues from such a levy. Neither did he describe how such a levy would operate in practice.

No reply to Dr Reilly from Mr Noonan was included in the information released by the Department of Finance.

However, Budget 2014 was agreed without any sugary drinks levy. In addition, the fact that the entire text of Dr Reilly’s letter was released without redactions suggests the proposal is not currently the subject of a deliberative process.

Separate correspondence to Mr Noonan shows Dr Reilly wanted to increase the price of a pint of beer or cider and a standard spirits measure by 30 cent and the price of a bottle of wine by €1.

The increase eventually sanctioned by the Government was 10 cent on the pint and spirits measure and 50 cent on a bottle of wine.

While Dr Reilly wanted to increase the price of a 20-pack of cigarettes by €1, the increase set down on budget day was 10 cent.