US sugar taxes cut sugary beverage purchases by 33% across five key cities

There are currently eight jurisdictions in the US with taxes on sugar-sweetened beverage (SSB) taxes - most commonly simply referred to as sugar taxes - with the study analyzing five of them. The researchers believe their study is one of the first to give an overview of multiple US cities with taxes, giving a better overview of the effects of taxation (most studies to date have focused on individual jurisdictions and one control group, thus risking including unintentional biases from the unique characteristics of each area). “The findings have important implications for the potential efficacy of SSB taxes across larger geographic jurisdictions and at the national level," they write in the study, published in JAMA Health Forum. "Scaling SSB excise taxes across the US would likely generate significant population health benefits and medical cost savings.” SSB taxes: prices up, consumption down Led by Scott Kaplan of the Department of Economics, US Naval Academy, researchers looked at how prices and purchases of SSBs changed following the introduction of taxes. They looked at taxes introduced in five cities - Boulder, Colorado (introduced in 2017); Philadelphia, Pennsylvania (2017); Oakland, California (2017); Seattle, Washington (2018); and San Francisco, California (2018) - comparing them with control groups from other cities. The researchers charted data from tax implementation to two years after. Prices of SSBs increased by an average of 33% in the two years following the implementation of a tax: corresponding to an average price increase of 1.3c per oz. Most prices increases were passed on to consumers: with a 92% ‘pass-through’ rate. Meanwhile, SSB purchases declined in volume by an average of 33%. Both price increases and the corresponding volume decreases were seen 'immediately' following the introduction of taxes. Furthermore, these changes in prices and purchases remained stable in the years following their implementation. The biggest impact was seen in Philadelphia: which saw prices rise by 58% and volumes fall by nearly 47%. All five cities saw a rise in prices and a decrease in volumes: with the larger prices changes associated with the biggest impact on volumes. One of the questions for sugar taxes – particularly when applied to a small geographical area such as in cities – is whether consumers simply cross the border to make cheaper purchases. But the study also looked at adjacent zip codes to the SSB-taxed cities: finding no statistically significant evidence that purchases had increased in these neighboring areas. Taxation, effectiveness and corresponding health benefits The WHO backs sugar taxes: and in December called on countries to increase their implementation across all SSBs. Berkeley, California, was the first city in the US to introduce a sugar tax back in 2015. But the beverage industry has fought hard against such taxes: questioning their effectiveness and highlighting voluntary efforts to reduce sugar. And the introduction of sugar taxes has rarely been straight-forward: take, for example, lengthy debates and efforts in California to block their introduction, or outright rejections in jurisdictions such as Santa Fe. But the researchers highlight that their findings on purchase reductions should be interpreted in the context of previous studies that have shown price, purchasing behavior and health outcomes are all linked. “Several studies have found that a 15% to 20% increase in price/decrease in consumption generates significant health benefits, including reductions in myocardial infarction events, ischemic heart disease, coronary heart events, strokes, diabetes, and obesity," notes the authors. “This study estimated a 33.1% increase in price and a corresponding 33.0% decrease in volume, suggesting health benefits at least as substantial as those found previously. "Additionally, studies have suggested that SSB taxes are highly cost-effective." " Wang et al found a nationwide tax could have avoided $17bn in medical costs between 2010 and 2020. “ Lee et al found approximately $53bn in cost savings throughout an average individual lifetime. More recently, White et al found that a 27% reduction in consumption in Oakland is expected to accrue more than $100,000 per 10,000 residents in societal cost savings during a 10-year period. “This study’s findings suggest SSB taxation would likely generate significant improvements in population health and substantial cost savings.” Source: 'Evaluation of Changes in Prices and Purchases Following Implementation of Sugar-Sweetened Beverage Taxes Across the US'. Published: January 5, 2024. doi:10.1001/jamahealthforum.2023.4737 Scott Kaplan, PhD; Justin S. White, PhD; Kristine A. Madsen, MD; Sanjay Basu, MD, PhD; Sofia B. Villas-Boas, PhD; Dean Schillinger, MD

US sugar taxes cut sugary beverage purchases by 33% across five key cities

Sugar taxes in Boulder, Colorado; Philadelphia, Pennsylvania; Oakland, California; San Francisco, California; and Seattle, Washington were associated with a 33% reduction in purchases by volume, according to a study published this month.

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