Sugary Drink Tax Prompts Substantial Decline in Purchases (2024)

After five US cities implemented a tax on sugary beverages, purchases of these beverages declined substantially, according to a new study coauthored by a School of Public Health researcher.

Published in JAMA Health Forum, the study found that retail prices of sugary beverages rose by 33 percent in the two years following the implementation of a local excise tax on these drinks in Philadelphia, Oakland, Seattle, San Francisco, and Boulder. During this same time period, purchases of these beverages declined by 33 percent—and consumers did not appear to cross state lines to purchase non-taxed sugary drinks.

At least eight US jurisdictions and 50 countries have implemented a sugar-sweetened beverage tax, also known as a soda tax, in the last several years with a goal to reduce the purchase and consumption of sodas, fruit drinks, sports drinks, energy drinks, and sweetened coffee drinks—all of which are leading sources of added sugar in the average American diet. These products contribute to a range of adverse health issues, from weight gain and obesity to cardiovascular disease and type 2 diabetes.

The study is among the first to examine the outcomes of a sugar-sweetened beverage tax in multiple cities—as opposed to most previous studies that have focused only on a single city or state—gaining valuable insight into the broader impact of this tax. The new data underscores the effectiveness of the tax, dispelling critics’claims that this policy would be ineffective, punitive, and harmful to the economy. It also suggests that expanding the policy at the state or national level could benefit population health.

“A concern raised by the beverage industry and some past studies is that some consumers will simply buy their sodas and other sugary beverages in nearby untaxed areas,” says study second authorJustin White, associate professor of health law, policy & management.“Yet, we found no evidence that consumers responded to the tax by shopping for beverages in nearby areas. As a result, the taxes led to an overall reduction in purchases of sugary beverages, thereby reducing exposure to a leading risk factor for diabetes and other diet-related diseases.”

For the study, Whiteand colleagues from the United States Naval Academy, University of California, Berkley, University of California, San Francisco, and the University of Toronto usedstate-of-the-art causal inference methods to analyzeretail data andestimate the change in price and total purchases of sugary beverages in the above-mentioned cities. They focused on priceand purchase changes within the two years following the tax implementation in each city,between January 2012 and February 2020.

Across cities, the increase in sugary beverage prices—at an average of 1.3 cents per ounce—and corresponding decrease in purchases of these drinks occurred immediately after the tax was levied, and continued throughout the two-year period.

The analysis excluded artificially sweetened beverages, as Philadelphia is theonly city in the nation to apply the excise tax to those drinks, and there is stronger data around the health risks of beverages with added sugar than those with artificial sugar, White says.

He hopes that future studies will provide more concrete insight into the health effects of sugary beverage taxes. White’sprior research has linked these taxes and subsequent decrease in beverage consumption to a lower risk of health complications among pregnant women and their infants, but knowledge overall is still limited.

“Several studies have shown that the decreased sugar-sweetened beverage consumption due to these taxes would be expected to translate into reductions in diet-related disease, but it’s been difficult to show this empirically,” White says. “There’s a need for more research to document the extent to which sugary beverage taxes improve health outcomes.”

The study was led by Scott Kaplan, assistant professor of economics at the US Naval Academy. Additional authors include Kristine Madsen, professor at the University of California, Berkeley, Sanjay Basu, primary care physician and economist at the University of Toronto, Sofia Villas-Boas, Robert Gordon Sproul Distinguished Professor in Agricultural Economics at UC Berkeley, and Dean Schillinger, professor of medicine at the University of California, San Francisco.