Soda taxes lead to reduction in sales
Health impact from cuts to consumption unclear
Soda taxes that have added to the price of cans, bottles and Big Gulps in a handful of cities including Philadelphia and San Francisco have effectively cut consumption of sugary drinks in those cities, a new study found.
Every 1% increase in cost drove people to cut back by 1%, amounting to a total reduction of 33% – enough, researchers said, to have a substantial benefit for public health.
Reducing people’s sugar consumption is a boon to American health care, said Dr. Dean Schillinger, who directs the Health Communications Research Program at the University of California, San Francisco and led the research, published Friday in JAMA Health Forum.
“When you think about the fact that one in four dollars of our health care spending goes to diabetes alone, any kind of incremental improvement we can get will have massive effects,” Schillinger said.
Previous studies, many funded by the beverage industry, have shown conflicting results from increasing soda taxes.
This study took a broad view, looking at multiple cities, and used a new statistical method to account for the fact that the cities implemented taxes on sugarsweetened beverages at different times.
“It’s not surprising that when you tax something heavily, you will get less of it,” said Guy Bentley, a policy analyst and director of consumer freedom research with the Reason Foundation, a libertarian think tank committed to “individual freedom and choice, limited government, and market-friendly policies.”
What’s not clear, Bentley said, is whether getting people to consume less soda and other sugar-sweetened beverages will necessarily improve their health.
Studies from the U.K. and Mexico, where soda is taxed, have not shown dramatic health benefits, he said. And unlike smoking and drinking which have a larger cost to society, the larger cost of soda consumption isn’t clear.
“Governments have a right to tax individuals’ behavior if they are harming others, but people drinking soda is not clearly harming others,” Bentley said. Schillinger strongly disagrees. Previous studies have linked sugarsweetened beverages, including sodas, to weight gain, because people generally don’t compensate for calories they consume as liquid. They have also been linked to high cholesterol, high blood pressure, dental health problems, gout, heart disease and type 2 diabetes.
A primary care doctor at a public hospital, Schillinger said half the patients he cares for have type 2 diabetes. “When you ask how much they drink sugarsweetened beverages or have drunk (them) over the course of their lifetimes, it’s absolutely astounding,” he said.
Very few of them are aware of the health hazards of drinking too much soda or consuming too much sugar, he said. They say drinks like Hi-C, KoolAid, Sprite, Coke and 7 Up are ubiquitous in their neighborhoods, at their family tables and on local billboards. Celebrities promote these drinks.
Patients say these drinks are “part of our culture,” Schillinger said. “But that’s not true. It’s been imposed on people’s culture.”
When patients try to cut back, he said, many have withdrawal symptoms such as irritability and cravings, similar to those seen with alcohol and other addictive substances.
Americans have been drinking less soda over the last 10 to 15 years, as they became more aware of the health effects of consuming too much sugar, data shows. But most of that reduction has come among the wealthier and welleducated, Schillinger said, not his patients.
And still, more than 60% of Americans drink a sugar-sweetened beverage every day, with the average person consuming 145 calories a day from sugarsweetened drinks, according to the most recent data from the Centers for Disease Control and Prevention.
The new research looked at Boulder, Colorado; Philadelphia; Seattle; San Francisco; and Oakland, California, all of which have added soda taxes since the mid 2010s. In Boulder, for instance, the tax adds 2 cents per ounce to each sugary beverage, or as much as a 30% increase to the price of a drink.
Previous studies have raised questions about whether people simply shifted their purchases to stores in neighboring jurisdictions that didn’t have taxes. Scott Kaplan, an economics professor at the U.S. Naval Academy in Annapolis, Maryland, who helped lead the new research, said he doesn’t think shopping elsewhere drove the decline seen in this study.
“We’re including a lot of stores that are not super-close to the border,” he said. “I think our study shows rigorously and accurately that there isn’t crossborder shopping at this geographic level.”
Still, he and Schillinger said their research suggests these taxes should be implemented at a state, regional or even national level to prevent people from simply crossing borders to buy beverages for less.
“Taxation is a very important part of a multi-faceted solution” to getting people to drink fewer sugar-sweetened drinks, Schillinger said.
Tobacco control efforts showed that tax increases have to be paired with marketing campaigns and regulations to effectively change public behavior, he said.
The American Beverage Association provided a long list of studies they said contradicted the current research. Many of those studies were funded at least in part by the industry.
“The beverage industry’s strategy of offering consumers more choices with less sugar, smaller portion sizes and clear calorie information is working – today nearly 60% of all beverages sold have zero sugar and the calories that people get from beverages has decreased to its lowest level in decades. On the other hand, a beverage tax has never been shown to improve public health or to reduce beverage calories in a significant way,” said association spokesman William Dermody.
“Beverage companies, government and public health can work together to support families in their effort to find balance without unproductive taxes that hurt consumers, small businesses and their employees.”
Economist Dmitry Taubinsky, who was not involved in the new study but conducts related research, said he thinks it’s particularly appropriate to add a tax to a product like sugary drinks.
Yes, people with lower incomes spend more on these drinks, so the tax is “regressive,” costing them more than wealthier people. But they are also more likely to lack the nutrition knowledge about how unhealthy these drinks can be and more likely to report that they wish they spent less money on these products, said Taubinsky, an associate professor at the University of California, Berkeley.
“I think it’s appropriate for government to help people get to that correct level of consumption that they would have if they were fully aware of the health harms,” he said, comparing it to road signs the government installs to keep pedestrians from crossing the street randomly and getting hit by cars.