Sugary drink tax third parties (MXC) and so want to consume at the unregulated market equilibrium to maximize their utility. This means that there is overconsumption of sugar and a welfare loss is created. The sugary drinks tax, a Pigovian tax, is a way to correct the negative externality by regulating the consumption of sugary drinks. Without a sugary drink tax, taxpayer money is used to pay for higher health care costs incurred from high consumption of sugar. Although this solution corrects the negative consumption externality, taxpayers that consume sugary drinks moderately and hence do not contribute to higher health care costs, still
Food and Drink Federation including the UK government (particularly the Department of Health; the Department for Environment, Food and Rural Affairs; and the Department for Business, Innovation and Skills), regulators, consumers and the media. The Food and Drink Federation tackles a range of issues on behalf of its members under the three core areas of health and wellbeing; food safety and science; and sustainability and competitiveness; readiness and calorific contribution; it also aims to highlight the work industry conducts under these areas. For example, its Five-fold Environmental Ambition sets out where manufacturers are looking to make a difference to the environment through reducing CO2