Taxes on sugary drinks reduce consumer sales by 33%, study finds


Consumer purchases of sugary sodas, coffees, teas, and energy, sports and fruit drinks have dropped by a third as prices have risen an average of 31%, a new analysis of restrictions implemented in five U.S. cities suggests.

“We measured how consumers change their consumption in response to price changes,” said Scott Kaplan, an assistant professor of economics at the U.S. Naval Academy in Annapolis, Maryland.

“For every 1% increase in price, we saw a 1% decrease in purchases of these products,” Kaplan said. “The decline in consumer purchases occurred immediately after the taxes went into effect and remained the same over the next three years of the study.”

William Dermody, vice president of media and public affairs for the American Beverage Association, which represents the sugar-sweetened and food beverage industry, told CNN via email that such taxes are “unproductive” and hurt consumers, small businesses and their employees.

“The beverage industry's strategy of offering consumers more choices with lower sugar, smaller portion sizes and clearer calorie information is working – nearly 60% of all beverages sold today contain zero sugar and people's calories from beverages have fallen to their lowest level in decades.” Dermody said.

Many sugar-sweetened beverages are packed with calories, have little to no nutritional value, and contribute to obesity Chronic diseasesIncluding Heart disease, cancer, diabetes, Obesity and stroke, studies find. too A service According to a 2020 study, one sugary soft drink daily is associated with an increased risk of cardiovascular disease.

No or low calorie diet drinks are also included Chronic diseaseBoth sugary and artificially sweetened beverages are shown Increases the risk of premature death From many reasons.

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The new study did not examine the health effects of reducing sales of sugary drinks, but an earlier study by Tufts University researchers did, Kaplan said.

That study, Published in 2019“A 15% to 20% reduction in sugary beverage consumption, if scaled up nationally, would reduce health care costs by $270 per person over the average American lifetime, or $45 billion in total,” Kaplan said.

A 33% reduction in consumer purchases would have a similar impact on health care spending, said Tufts researcher Park Wilde, lead author of the 2019 study.

“Based on the large, estimated impacts on beverage purchases in this study, these beverage taxes may have reduced obesity, heart disease, and deaths in 5 cities,” said Wild, a professor at Tufts' Friedman School of Nutrition and Science Policy. in Boston.

“The main contribution of this new study is an improved estimate of price effects. If this study had been available when we did the research, I would have cited it,” Wilde said in an email. “This seems to me to be the best estimate of price effects that I have seen.”

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too A service According to a 2020 study, one sugary soft drink daily is associated with an increased risk of cardiovascular disease.

Nine U.S. jurisdictions and more than 50 countries have enacted some form of consumer tax on sugar-sweetened beverages, typically passing that cost on to consumers by taxing distributors, Kaplan said.

Some U.S. cities have imposed sales taxes on sugary drinks at checkout, typically 1% to 2%, Kaplan said. Other cities tax those drinks by the ounce, which raises the overall cost of the item even more.

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“Maybe you spend $1 on a 12-ounce soda,” he said. “If it's an ounce of tax, that's an extra 24 cents on your dollar.”

However, sales taxes do not affect the consumer's pocketbook to the same extent. For example,

Washington, DC imposes an 8% sales tax on sugar-sweetened beverages, 2% higher than the standard 6% sales tax. Now the same can of soda costs 2 cents more per ounce under the tax instead of an additional 24 cents.

“So, the one-ounce tax is really big, and we think those are the types of taxes that have the potential to have really big impacts,” Kaplan said.

analysis, Published on Friday The JAMA Health Forum looked at ounce tax plans by zip code in Boulder, Colorado; Oakland, California; Philadelphia; Seattle; and San Francisco.

“We only looked at sugar-sweetened beverages sold in retail or convenience stores. Mass-market stores, supermarkets, convenience stores, and drug stores made up our sample,” Kaplan said.

He said the impact of a sales tax on the sale of sugar-sweetened beverages at restaurants and artificially sweetened beverages was not part of the study. However, one of the cities studied, Philadelphia, taxes diet drinks with great success, Kaplan said. Because the taxes are “broadly inclusive, including regular and artificially sugar-sweetened beverages,” other studies have found Philly's success rate in reducing consumer consumption is greater than many other cities, he added.

Despite the impact of sugar taxes from this study and others, Kaplan said, additional cities may have a harder time implementing similar public health programs in the future.

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“The last tax we saw was implemented in January 2018. And you might ask, 'Well, why hasn't it come up yet?' That is the reason States like California and Washington They've passed bills that basically prevent cities from doing that,” Kaplan said.

“If states are going to block these taxes from going to the city level, we can consider ways to implement these taxes at a larger geographic level, possibly even at a federal level.”

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