A HOLYROOD bid to bring in a sugar tax in an attempt to tackle the country’s obesity problem could be set back if the TTIP agreement between Europe and the United States goes head, campaigners have warned.

Ministers have been considering such a measure after senior experts suggested levies on soft drinks such as colas and lemonades would help tackle health issues related to poor diet. However, the Mexican Government was forced to pay out $77 million to US sugar company Cargill when it initially drew up plans for a sugar tax several years ago.

The sugar tax was introduced but during the process the Mexican authorities had to hand over “compensation” to Cargill.

The firm had used a legal measure called Investor State Dispute Settlement in the North American Free Trade Agreement (NAFTA) which allows firms to take action over legislation they argue will damage their profits.

The Transatlantic Trade and Investment Partnership (TTIP) is currently being negotiated between the European Union and the US, and, like Nafta, includes a ISDS mechanism.

Nick Dearden, director of the anti-TTIP campaign group Global Justice Now, said the TTIP treaty could hamper any plans for a sugar tax in Scotland. “The sugar tax is a good example of how governments might want to use taxation as a means of achieving a social benefit – in this case addressing the obesity crisis,” he said.

“But under TTIP companies could sue governments in secret courts if they felt such tax measures were harmful to their profits. This is what happened when Mexico tried to introduce a sugar tax. US agribusiness companies were able to use a similar trade deal to sue Mexico for millions.”

Last year, Professor Simon Capewell, of the University of Liverpool, called on the Scottish Government to introduce a sugar tax, saying sugar consumption had fallen in countries where one had been brought in.

Speaking at the Royal College of Physicians of Edinburgh conference, he added: “Scotland has an excellent track record in addressing public health issues. Notable achievements include smoke-free public places and proposals for minimum unit pricing for alcohol. We need to explore how these developments could be repeated with sugary drinks.

“The medical profession has learned valuable lessons from two centuries of public health successes and it is clear that a duty on sugary drinks can play a vital role.”

Figures show that one in three adults in Scotland are thought to be obese, while one in three Scots children are at risk of obesity, which is linked to diseases such as cancer and diabetes. A report by Scottish Parliament researchers last year revealed that obesity cost the Scottish economy up to £4.6 billion a year in terms of people dying younger or being off sick from work and drained the NHS of up to £600 million annually.

The creation of new taxes is broadly reserved to Westminster. However, Holyrood could propose such a law so long as it got the approval of Westminster.

The 12th round of TTIP negotiations between the European Commission and the US will take place on 22 February. ISDS is still included in the proposals.

Responding to the call for the Scottish Government to introduce a sugar tax, a spokesman last year said ministers will “consider the evidence around the effect of food taxes in helping to improve dietary choices”.

Yesterday a Scottish Government spokesman added: “The Scottish Government has no direct power to introduce a sugar, or soda, tax. However, we are examining what further effective actions we can take within the current powers of the Scottish Government and we are continuing to work closely with retailers, including major supermarket chains, to encourage them to offer healthier choices.

“There are clear health benefits associated with reducing sugar consumption, as part of a healthy diet. We’re taking a range of actions to improve diet, including spending over £10m in the four years to 2016 on projects to encourage healthy eating.”

The National View: Holyrood should take the lead and roll out a sugar tax