Beverage taxes work

We talked just last week about the dangers of drinking sugar-sweetened beverages and repeated our recommendation that people drink water, tea, or coffee.

If only it were that easy to get people to stop drinking sodas. One of the ways people have tried to influence how much soda people are drinking is by taking a note from the fight against smoking: tax it.

Despite the clear evidence that taxing cigarettes has reduced the sales of cigarettes, there's been conflicting evidence that taxing beverages will do the same.

A study just published in the Annals of Internal Medicine (2020;172:380-397) looks at the effect of a 1-cent-per-ounce tax on sugar-sweetened and artificially-sweetened beverages implemented in Cook County, Illinois in August of 2017. Unfortunately, the statute was repealed just four months later

Dr. Lisa Powell of the University of Illinois at Chicago and her team obtained the retail sales records of all nonalcoholic beverages sold in all supermarkets, grocery stores, convenience and drug stores, mass merchandise and dollar stores located within the borders of Cook County during the four months of 2017 that the tax was in place, as well as the records from the same dates the year previous: 2016. Knowing that some people might simply buy their beverages where the tax was lower, they also acquired the same sales records from the surrounding area within 2 miles of the borders of Cook County.

As a comparison, they also acquired that same information from the same periods of time from St. Louis County, Missouri, a similarly-sized area without a beverage tax.

The researchers classified the taxed beverages into 5 types: soda, sports drinks, energy drinks, tea or coffee, and juice drinks. Untaxed beverages were water, unflavored milk, and unsweetened juice.

When the authors compared the average volume of sales of the taxed beverages in St. Louis from 2016 with those of 2017, the amounts were basically the same. Cook County, however, sold 27% less in 2017 than it did in 2016.

As the authors had expected, sales of taxed beverages went up in the border areas around Cook County by about 39%, with the purchase of soda alone going up a little over 50%. (Interestingly, people seemed to be mostly buying family-sized amounts - liters or multi-packs - rather than individual-sized servings.)

After calculating the increase in volume outside the borders of Cook County versus the decrease in volume within Cook County, the authors found that the overall intake of sugar-sweetened and artificially-sweetened beverages still dropped by 21%. Artificially-sweetened beverages fell more than sugar-sweetened beverages, but soda represented the largest drop of all sugar-sweetened beverages.

Untaxed beverages? Volume of sales remained about the same.

What this means for you

This certainly supports the idea that taxing sugar-sweetened beverages will help reduce their consumption. No, it won't eliminate it entirely - after all, people still smoke - but it can help.

Even better, it would be a good idea to earmark the funds generated by that tax to go toward healthcare related to obesity: Cook County took in over $60 million in those four months. From a 1-cent-per-ounce tax.

First posted: March 18, 2020