Do Soda Taxes Reduce Sugar Intake?

February 26, 2019
NACS News
Many cities and states are implementing soda taxes, but how effective are they in curbing the consumption of sugary drinks?
BERKELEY, Calif. – A study in The American Journal of Public Health looked at the relationship between soda taxes and their part in reducing the consumption of the sugary beverages they’re trying to control. It’s been five years since Berkley, California passed the first soda tax in the U.S.—and the soda tax fight is still being pursued today by states like Connecticut and California. Although the tax continues to be controversial because of questions about who is footing the bill and concerns about the impact of the tax on retailers, initial findings seem to indicate that, health-wise, the tax is doing its job—just maybe not as efficiently as was first thought.
The study looked at five years’ worth of data from Berkley, California, and found a 52% decrease in soda consumption in the first three years since the tax took effect. But in another example: In Philadelphia, 40% of residents were less likely to drink sugary beverages. But outside of the city, soda sales increased by 38%. Consumers were travelling outside of the city, outside of the tax’s geographical limits to purchase their soda.
Berkley’s 52% is slightly skewed because the nearby areas of Oakland and San Francisco also have similar taxes. So consumers can’t drive just one or two miles to get an affordable soda like in Philadelphia—they’d have to drive 10 or 15 miles instead.
Because Philadelphians can simply drive outside of the city to get their soda, the taxes aren’t bringing in as much money as expected. In the first year of the collection, revenues in Philadelphia totaled $79 million, which was 15% less than projected.
So, while taxes seem to be effective in reducing consumption, they also drive consumers far and wide in the search for non-taxed sugary beverages.