The estimated health and economic impacts of the introduction of taxation and warning labelling on foods high in fat, sugar or salt in England: A microsimulation study
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Background
Foods high in fat, sugar, or salt (HFSS) increase risk of obesity and diet-related illnesses. Some policies, limiting HFSS placements, advertisement, and promotion, have been introduced in the UK to lower HFSS exposure, but evidence remains limited on other policy options and their potential impacts. In this study, we estimated the health and economic impacts of implementing taxation and nutrient warning (NW) labelling on HFSS products.
Methods
We used the IMPACT NCD , a validated open-cohort microsimulation model, to simulate the health and economic impacts of implementing, for HFSS products, i) 8% taxation, ii) NW labelling, and iii) both combined among English adults aged 30-99 years over 15 years (2026-2040). The IMPACT NCD model utilises nationally representative surveys and routine administrative data to simulate policy and counterfactual scenarios over individuals’ life course within a competing risk framework. Based on available evidence, we estimated the policy impacts based primarily on assumed consumer-driven changes in energy and salt intake, but also examined likely reformulation in sensitivity analyses.
Findings
Compared with the current counterfactual scenario (i.e., no taxation, voluntarily implemented multiple traffic light labelling), an 8% tax rate on HFSS products would reduce obesity prevalence by 2.19 percentage points [95% uncertainty intervals (UI): (1.69, 2.73)], prevent 100 000 [95% UI: (65 000, 140 000)] type 2 diabetes mellitus (T2DM), 83 000 [95% UI: (55 000, 130 000)] cardiovascular disease (CVD), 64 000 [95% UI: (48 000, 96 000)] multimorbidity or multiple long-term condition (MLTC) (i.e., Cambridge Multimorbidity Score >1.5) cases, postpone 23 000 [95% UI: (14 000, 37 000)] deaths, and save a total of £53 billion [95% UI: (41, 67)] from a societal perspective (a sum of healthcare, social care, informal care, and productivity) over 15 years. NW labelling was estimated to reduce obesity prevalence by 0.48 percentage points [95% UI: (0.20, 0.85)], prevent 26 000 [95% UI: (13 000, 52 000)] T2DM, 24 000 [95% UIs: (10 000, 41 000)] CVD, 17 000 [95% UI: (8200, 29 000)] MLTC cases, and postpone 6200 [95% UI: (2200, 12 000)] deaths, and save £14 billion [95% UIs: (6.2, 24)]. Both policies implemented together would provide greater impacts with a 2.66 percentage-point [95% UI: (2.09, 3.28)] reduction in obesity prevalence, 130 000 [95% UI: (80 000, 170 000)] T2DM, 110 000 [95% UI: (68 000, 150 000)] CVD, 81 000 [95% UI: (58 000, 110 000)] MLTC cases prevented, and 29 000 [95% UI: (18 000, 45 000)] deaths postponed, and £66 billion [95% UI: (52, 82)] saved. All modelled policies were estimated to be cost-effective and have greater health benefits for individuals in deprived groups. Sensitivity analysis involving both consumer behaviour and industry reformulation to reduce the number of products classed as HFSS yielded similar estimates.
Interpretation
This is the first modelled evidence on the health and economic impacts of HFSS taxation and NW labelling. Implementing both taxation and NW labelling as additional measures to reduce HFSS consumption in the UK may provide substantial benefits in addressing obesity and diet-related diseases.
Funding
National Institute for Health and Care Research
Research in context
Evidence before this study
We searched modelling studies on taxation or nutrient warning (NW) labelling on products high in fat, sugar or salt (HFSS) on PubMed from 1 st January 2000 to 30 th June 2025 using the following search terms: (“food polic*“OR “fiscal polic*” OR tax* OR“label polic*” OR “nutr* label*” OR “food* label*” OR “front of pack label*” OR “front-of-pack label*” OR “warning label*”) AND (*simulation OR “model* study”) based on titles and abstracts, restricted to human subjects. We identified 241 articles.
To date, no modelling studies have estimated multiple policy options, such as taxation and NW labelling on all HFSS products in the UK. A handful of studies have reported the substantial impact of taxation on sugary drinks, including in the UK, but limited studies have estimated the impact of taxation on broader unhealthy or HFSS products. One study modelled an 8% tax rate on junk food in New Zealand and reported the policy would reduce the incidence of diabetes mellitus by 7%, coronary heart disease by 3%, and the all-cause mortality rate by 1% over 30 years. Evidence from Mexico suggests greater benefit from doubling the tax rate compared to the currently implemented 8% tax rate on non-essential energy-dense foods. For NW labelling, a previous study estimated that NW labelling on all liable packaged products would reduce obesity prevalence by 2.64 percentage points and prevent 46 000 obesity-related deaths in England over 20 years, but the specific impacts of NW labelling on HFSS products, as well as the broader benefits on different health outcomes and associated economic impacts, have not yet been estimated. A study from Mexico reported that NW labelling could reduce 1.3 million obesity cases or by 4.98 percentage points in its prevalence 5 years post-implementation.
Added value of this study
The present study is the first modelled evidence of the health and economic impacts of taxation (an 8% tax rate, informed by the currently implemented tax rate in Mexico) and NW labelling in England. We used the IMPACT NCD – a validated dynamic, stochastic, discrete-time, open-cohort microsimulation model with a competing risk framework at its core – to simulate the health and economic impacts of implementing, for HFSS products, i) taxation, ii) NW labelling, and iii) both combined among English adults aged from 30 to 99 years over a 15-year simulation horizon (2026-2040). We estimated the impacts on a range of health outcomes, including obesity, type 2 diabetes mellitus, cardiovascular diseases, multimorbidity or multiple long-term conditions (MLTCs), and all-cause mortality. Economic impacts were projected from healthcare (medical) and societal (medical, social care, informal care, and productivity) perspectives. We estimated that implementing both policies together would have greater impacts in addressing obesity and diet-related diseases, while also resulting in considerable economic savings. The modelled policies may reduce absolute and relative social health inequalities, as greater benefits were estimated in individuals from deprived groups.
Implications of all the available evidence
The present study provides evidence to support the UK Government in considering both HFSS taxation and NW labelling as additional measures to existing policies (restrictions of HFSS placements, advertisements, and promotions) to address obesity and diet-related diseases.
