Rensi talks about the soda tax
A study released Friday found that sales of sugary drinks fell by about a third in five U.S. cities after they began taxing the products.
According to the study published in the journal JAMA Health Forum, soda taxes implemented in every city drove up sugar-sweetened beverage (SSB) prices and led to a decline in sales that continued as policymakers intended.
Researchers say their findings show soda taxes are an effective policy tool to help consumers reduce their sugar consumption, but the beverage industry opposes them.
The five U.S. cities examined were Boulder, Colorado; Philadelphia; Oakland, California; Seattle and San Francisco. The amount of taxes levied on sugary drinks in these cities ranged from 1 to 2 cents per ounce. A 2-liter bottle of soda increases the price by up to $1.36 in taxes.
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A customer walks past shelves of soft drinks at the Berkeley Bowl West market on November 6, 2014 in Berkeley, California. (Paul Chinn/The San Francisco Chronicle via Getty Images / Getty Images)
Previous studies on the effects of soda taxes have examined a taxed city compared to a control city with no taxes, researchers said. This study differed in that it analyzed the overall impact of SSB taxes in multiple cities to paint a picture of what might happen if soda taxes were more widespread, lead author Scott Kaplan, an economics professor at the U.S. Naval Academy, told NPR in an interview.
“SSB excise taxes were associated with large, sustained declines in SSB purchases in five taxable U.S. cities due to tax-related price changes,” the study said.
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Sugar is listed in the ingredients of a bottle of soda displayed in the cooler of a food truck on June 10, 2015 in San Francisco. (Justin Sullivan/Getty Images/Getty Images)
“The results show that shelf prices of SSB products increased an average of 33.1% (1.3¢ per ounce) in the years following the implementation of the SSB tax, representing a 92% price pass-through rate from dealers to retailers consumer corresponds. Volume sales fell by 33.0% over the same period, with no evidence of changes in cross-border purchasing in untaxed adjacent areas.”
The authors noted that previous studies have found that a 15 to 20 percent increase in the price or decrease in consumption of sugary drinks led to significant health benefits, including reductions in heart disease, stroke, diabetes and obesity.
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Volunteers organize an exhibit showing the sugar content in soda before a rally to launch a campaign to tax sugar-sweetened drinks in San Francisco on February 1, 2014. (Paul Chinn/The San Francisco Chronicle via Getty Images / Getty Images)
“This study estimated a price increase of 33.1% and a corresponding volume decrease of 33.0%, suggesting that the health benefits are at least as great as those previously found,” the authors write.
Additionally, soda taxes could prove cost-effective by reducing medical costs to treat illnesses caused by consuming too much sugar, the researchers said.
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However, the drinks industry has spoken out against “discriminatory” taxes on its products. The American Beverage Association, an industry and trade group, said taxes limit consumer choice and that free market forces over time have encouraged companies to offer reduced-sugar or no-sugar options to consumers.
“The fact is that taxes don’t make people healthier, they just make people poorer,” ABA states on its website. “That’s why we’re working with national and local health organizations on a comprehensive effort to reduce sugar consumption in the communities where it is needed most.”