Cities with soda taxes saw sales of sugary drinks fall as prices rose, study finds
Five U.S. cities which imposed taxes on sugary drinks saw prices rise and sales fall by 33%, according to a new study. Justin Sullivan/Getty Images hide caption
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Five U.S. cities which imposed taxes on sugary drinks saw prices rise and sales fall by 33%, according to a new study.
Justin Sullivan/Getty Images
Sales of sugary drinks fell dramatically across five U.S. cities, after they implemented taxes targeting those drinks – and those changes were sustained over time. That's according to a study published Friday in the journal JAMA Health Forum.
Researchers say the findings provide more evidence that these controversial taxes really do work. A claim the beverage industry disputes.
The cities studied were: Philadelphia, Seattle, San Francisco and Oakland, Calif., and Boulder, Colo. Taxes ranged from 1 to 2 cents per ounce. For a 2-liter bottle of soda, that comes out to between 67 cents to $1.30 extra in taxes.
While prior studies have looked at the impact of soda taxes, they usually studied one city at a time. This new study looked at the composite effect of the taxes in multiple cities to get an idea of what might happen if these taxes were more widespread – or scaled to a state or national level, says Scott Kaplan, an economics professor at the U.S. Naval Academy and the study's lead author.
Kaplan and his colleagues found that, on average, prices for sugar-sweetened drinks went up by 33.1% and purchases went down by basically the same amount – 33%.
"In other words, for every 1% increase in price, we find that purchases fall by about 1%," says Kaplan.
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So when people had to pay more for sugary drinks, they reduced their purchases – and the effect was large and sustained.
But are people simply buying their sugary drinks elsewhere where it's cheaper?
Kaplan notes, prior research findings on that question have been contradictory. Some studies that focused on Philadelphia's sugary drink tax have found that, while sales of sugary drinks dropped significantly in the city, they actually went up in surrounding areas – indicating people were traveling to avoid the taxes. Other studies have found no such changes. In the new study, Kaplan and his colleagues didn't find evidence that consumers were traveling to make cross-border purchases.
Jennifer Pomeranz, an associate professor at the School of Global Public Health at New York University, says taxes that target sugary drinks are good public health policy because these drinks have no nutritional value, but they are linked with diet-related diseases.
As Kaplan notes, "sugar sweetened beverages make up a quarter of all the added sugar we see in the average adult American diet. And that's a really big amount."
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Too much added sugar is linked to a host of poor health outcomes, including diabetes, obesity and heart disease. Sugary drink taxes are designed to discourage purchases to curb consumption.
In 2019, both the American Heart Association and the American Academy of Pediatricians officially endorsed soda taxes as a good way to reduce the risks of childhood obesity. And just last month, the World Health Organization called on countries to increase taxes on sugary drinks as a way to promote healthier diets.
While the U.S. saw a handful of major cities pass these taxes starting about a decade ago, the soda industry poured millions of dollars into fighting those efforts. In some states, opponents passed laws that basically stripped localities of the power to be able to pass soda taxes, and the movement basically stalled, says Pomeranz. The new findings are "great," she says of the new study. "I am thinking it could renew interest."
In a statement to NPR, the American Beverage Association said that the industry's strategy of offering consumers more choices with less sugar is working, noting that nearly 60 percent of beverages sold today have zero sugar.
"The calories that people get from beverages has decreased to its lowest level in decades," the ABA said. The industry group said that sugary drink taxes are unproductive and hurt consumers.
This story was edited by Jane Greenhalgh
FAQs
Cities with soda taxes saw sales of sugary drinks fall as prices rose, study finds. Soda taxes are meant to discourage people from drinking too much sugar, which is linked to a host of bad health outcomes. Cities that imposed the taxes saw a 33% decrease in the sale of sugary drinks.
Do taxes on soda really lower sugar intake? ›
The new study found that retail prices of sugar-sweetened beverages increased by 33.1% over the two years following tax implementation in each city studied, and that there was a corresponding decrease in purchases of 33% over the same timeframe.
What US cities have soda taxes? ›
A claim the beverage industry disputes. The cities studied were: Philadelphia, Seattle, San Francisco and Oakland, Calif., and Boulder, Colo. Taxes ranged from 1 to 2 cents per ounce. For a 2-liter bottle of soda, that comes out to between 67 cents to $1.30 extra in taxes.
How will new sugary drink taxes impact people and cities? ›
Raising the price of sugar-sweetened sodas, coffees, teas and energy, sports and fruit drinks by an average of 31% reduced consumer purchases of those drinks by a third, according to a new analysis of restrictions implemented in five US cities.
What are the pros and cons of sugar tax? ›
Taxes that target high-sugar drinks provide the most sugar reduction relative to the economic burden placed on consumers. Taxes based on sugar content minimize the cost of reducing sugar in soft drinks. But taxes based on volume or price minimize the cost of raising revenue by taxing sweetened beverages.
What is the purpose of the soda tax? ›
Lawmakers often promote soda taxes as a way to both decrease sugar consumption and raise revenue, often for important and popular initiatives like education or health care. However, these taxes must either be focused on raising revenue or decreasing soda consumption; it cannot do both.
Why is soda taxed in Ohio? ›
Soft drinks are not considered “food” and are therefore taxable. “Food” is defined as substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value.
Should we pay more for sugary drinks? ›
Just one serving of a sugary drink daily could put you at higher risk for heart disease, according to the American Heart Association. That's scary! An extra tax would make sugary drinks more expensive, so fewer people might buy them. People might choose better options, like water, and get healthier in the process.
What are the arguments against sugar taxes? ›
Arguments against SSB taxes tend to closely mirror those used against tobacco taxes, including that these taxes are not effective, are regressive, negatively affect employment and economic growth, and violate international, regional, or national law.
Are soda sales decreasing? ›
In the past 15 years, soft drink consumption declined by 60 percent just for teenagers. Americans are ditching their sugary soft drinks and picking up healthier options, primarily bottled water. People are turning away from high-priced, high-calorie beverages, leading to a substantial decline in demand.
An increase in the tax rate of 1 cent per ounce decreases household purchases of taxed beverages by 53.0 ounces per month (12.2%). This impact is consistent with a reduction in individual consumption of 5 calories per day per household member and eventual reduction in weight of 0.5 pounds.
What cities in the US currently have a sugar tax? ›
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.
How would a sugary drink tax affect your community? ›
Oakland residents have bought fewer sugary beverages since a local “soda tax” went into effect, and that is likely improving their health and saving the city money, a new study by UC San Francisco and UC Berkeley found.
What states have a sugary drink tax? ›
No state currently has an excise tax on sugar-sweetened beverages. Instead, soda taxes are levied locally in Boulder, Colorado; the District of Columbia; Philadelphia, Pennsylvania; Seattle, Washington; and four California cities: Albany, Berkeley, Oakland, and San Francisco.
Do you think a soda tax would work to reduce obesity? ›
In March 2019, the American Academy of Pediatrics and the American Heart Association officially endorsed soda taxes as an effective policy to reduce risks of childhood obesity.
What are the benefits of taxing sugar-sweetened beverages? ›
Reduces the rates of costly and preventable chronic diseases. Increases awareness about the harmful effects of sugary drinks. Discourages consumption of sugary drinks by raising their prices.
Is tax on sugar-sweetened drinks tied to higher prices fewer purchases? ›
Taxing sugar-sweetened beverages was linked with higher prices and fewer drink sales, according to data from more than 26 000 stores from 5 large cities across the US.
Does soda have reducing sugar? ›
Soda manufactures such as PepsiCo have been reducing sugars in their products over the years and are increasingly launching smaller package sizes of well-known sugary products to appeal to health-conscious consumers.
