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Quote:

Sugar is becoming one of the biggest risks for investors in the global food and beverage industry, fund manager AMP Capital says.

Amid rising obesity levels and growing healthcare costs, a new report from AMP Capital says concerns about the sweet stuff have begun limiting growth for companies manufacturing and selling high-sugar products.

"Sugar is emerging as one of the most prominent investment risks for the global food and beverage industry," AMP Capital's latest Corporate Governance Report, which looks at ESG [Environmental Social Governance] investment trends, said.

It pointed to moves including taxes on soft drink - so-called "soda taxes" - in Mexico, the United Kingdom and Philadelphia and changes to United States nutrition labelling laws as signs that sugar may no longer be such a sweet investment.

"Soft drink sales for some listed companies are flatlining or trending lower, and processed food purchases per capita are down in some markets," AMP said.

"There is evidence of increasing numbers of consumers making healthier food choices."

In Australia, AMP pointed to the Greens' policy to introduce a soda tax by the end of the year.

"While the major parties in Australia do not yet have plans to introduce any form of soda tax, the public discussion generated by the possibility of a soda tax has the potential to reduce consumption given that it shines a spotlight on the issue and accelerates consumer education about the health impacts of sugar," the report said.

"We believe these discussions will step up a notch during 2017."

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