In Cities With a Soda Tax, Shoppers Buy Fewer Sugary Drinks

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Sugary drink taxes are taking out the fizz across the nation.

From Washington, D.C., to Berkeley, Calif., sugary drink taxes are raising the price of soda, tea, and energy drinks, with the hope that people will buy fewer taxed drinks. These drinks do not contribute to good health, according to a Salud America! research review.

But are shoppers really buying fewer sugary drinks as a result?

A series of studies explores this question.

How Sugary Drink Taxes Affect Purchases

A new study from Mathematica Policy Research and others indicates that sugary drink taxes can reduce purchases of sugary drinks.

Researchers examined the impact of taxes in four cities: Philadelphia, San Francisco, Seattle, and Oakland. They compared changes in household monthly purchases to nearby cities and a matched set of households nationally.

sugary drink tax impact on pricing of drinksA 1-cent-per-ounce tax decreased household purchases of taxed sugary beverages by 53 ounces per month—a 12.2% decrease.

“This impact is small in magnitude and consistent with a reduction in individual consumption of 5 calories per day per household member and eventual reduction in weight of 0.5 pounds,” the researchers wrote in the study.

Other studies have found a larger impact with a larger tax.

For example, in Philadelphia, sales of sugary drinks dropped 51% the year after the tax, one study found.

Some of that decline was offset by an increase in sales in nearby zip codes. But the Mathematica study suggests the tax didn’t drive outside-the-city sales. People who were already buying them there, bought them more frequently.

“But even factoring in that cross-border shopping, Philadelphia has seen a 38 percent decline in the purchase of sweetened beverages,” reports Knowable. “That’s equivalent to an annual reduction of 78 million 12-ounce cans of sugary drinks, or 49 cans per person in a city of 1.6 million.”

Let’s look at Philadelphia more closely.

Sugary Drink Tax Impact in Philadelphia

Philadelphia’s Sweetened Beverage Tax, a 1.5-cent-per-ounce tax on sugary drinks, took effect January 2017. The Pennsylvania Supreme Court voted to uphold the tax in July 2018.

sugary drink tax soda tweetchatIn 2018, Mathematica and other researchers examined the tax.

They found the tax is being passed on to consumers, which in turn has stores in Philadelphia carrying fewer of the taxed beverages and more bottled water. They also found children who were drinking roughly 20 ounces of soda a day before the tax dropped their added sugar consumption by 22%, and adults dropped consumption by 31%.

Now in October 2019, the researchers updated their research and found a “particularly larger decline” in sugary drink purchases in Philadelphia, compared to San Francisco, Oakland, and Seattle. Based on store-exit interviews, the Philadelphia tax reduced purchases of taxed beverages relative to stores in comparison areas by about 9 ounces per shopping trip. That’s two 2-liter bottles a month.

“The tax in Philadelphia translates to a decrease of 126.11 ounces (27.7 percent),” according to the study.

Sugary drink taxThe decline is happening for many reasons, said David Jones, a senior researcher at Mathematica who co-led the updated research.

“The reason for the decline in Philadelphia was due to the tax’s unpopularity, price hikes by retailers and high consumption by residents prior to the tax,” Jones told the Philadelphia Tribune.

Additionally, the tax seems to reduce consumption among residents of color.

“And for African-American children, who have higher rates of sweetened beverage consumption and obesity nationally, Philadelphia’s tax reduced their intake of added sugars from beverages by 8 grams per day,” the Tribune reported.

Sugary Drink Taxes and Beyond

hand holding soda can pouring a crazy amount of sugar in metaphor of sugar content of a refresh drinkTo truly improve public health, a sugary drink tax that covers a larger geographic area would be most effective, John Cawley, an economist at Cornell University, told Knowable about his recent study.

“Optimally, this would be something that’s happening not at the city level but at the state or national level, so that there’s less incentive to just drive a mile or two to evade the tax,” Cawley said.

Taxes on sugary drinks are also paying for important health programs.

Sugary drink taxes also are among five pediatrician-approved recommendations to limit sugary drinks:

  1. Raise the price of sugary drinks.
  2. Reduce sugary drink marketing to children and teens.
  3. Remove sugary drinks from kid’s menus and emphasize healthy drink options. This is what Philadelphia now has done.
  4. Add accurate nutrition labels and information.
  5. Hospital should serve as models with policies to limit or discourage purchase of sugary drinks.

Salud America! also created an Action Pack to help school leaders push for Water Bottle Fountains in schools. This can boost access to water for Latino and all kids.

ADD A WATER BOTTLE FOUNTAIN IN YOUR SCHOOL!

 

 

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