Soda taxes may 'permanently reduce demand' for sugary beverages, new study suggests

By Mary Ellen Shoup

- Last updated on GMT

Photo Credit: GettyImages /  FangXiaNuo
Photo Credit: GettyImages / FangXiaNuo

Related tags: Soda tax, Sugar

Two years since Seattle introduced its sugar-sweetened beverage tax, new research indicates that the 1.75-cent per ounce tax has significantly curbed sales of soda, juice, and other sugar-sweetened drinks.

Implemented in some US cities between 2017-2018 (Berkeley, Seattle, Philadelphia), sugar-sweetened beverage taxes and their longer-term impacts on sales have not yet been studied, claimed University of Illinois Chicago researchers.

The study​ is the first to comprehensively evaluate the tax's long-term (two-year) impact across all store types and across all beverages and sugar-sweetened products including beverages and confectionery, according to researchers, who analyzed and compared data from Seattle (where the tax was implemented in 2018) to Portland, Oregon, a city of similar size and demographics but without a sugar-sweetened beverage tax.

Researchers looked specifically at the economic impact the tax had on sales of beverages and sweets sold over the past two years analyzing Nielsen retail scanner data on unit sales and measurements of sugar-sweetened products across grocery, drug, convenience, and dollar stores in Seattle and Portland (covering about 45% of all food store sales).

Findings: 23% volume reduction in sugar-sweetened beverages sold

According to researchers, after two years of implementation, the tax created a 23% reduction in grams of sugar sold from taxed beverages.

After accounting for some offsetting purchase behavior (consumers substituting sweets -- which are not taxed in Seattle -- for sugary drinks to avoid the tax) in which researchers noted a 4% increase in sugar sold from sweets, there was still a net 19% reduction in grams of sugar sold from taxed beverages at two-years post-tax.

Declines were larger for family-size (29%) compared to individual-size (10%) beverages; particularly for soda (36% decrease for family-size compared to no change for individual-size), added researchers.

Addressing the possibility that consumers may simply be crossing city lines to purchase sugary drinks at a lower price, researchers said that they found no change in volume sold of taxed beverages in Seattle’s 2-mile border area, suggesting no cross-border shopping. 

"Our studies show that even after accounting for potential substitution behaviors, like cross-border shopping or selection of other items with added sugars, these taxes have a large, sustained impact on reducing volume and grams of sugar sold from sugary beverages,"​ said study​ lead author Lisa Powell, professor and director of health policy and administration in the UIC School of Public Health.

"This suggests that taxes may permanently reduce the demand for sugary beverages and help to lower rates of health harms that are associated with added sugars."

'We need scientific data on longer-term impacts'

While ongoing research indicates sugar-sweetened beverage taxes are curbing sales of sugary drinks, Americans are still consuming too much sugar with 50% of adults and 65% of children consume more added sugars than recommended by current Dietary Guidelines​, ​which recommends added sugars make up 6% of average daily energy intake (the equivalent of 30g for someone on a 2,000 calorie-a-day diet), ​according to researchers.

"While we and others have published a number of studies on the short-term effects of SSB taxes where they have been implemented in the US, these taxes are still relatively new, and we need scientific data on longer-term impacts to understand if the policies have the potential to generate sustained public health benefits,"​  added Powell. 

Source: Journal of Public Health Policy

https://doi.org/10.1057/s41271-021-00308-8

Impact of a sugar-sweetened beverage tax two-year post-tax implementation in Seattle, Washington, United States

Authors: Lisa M. Powell; Julien Leider

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