New research backs the argument that “sin taxes” lead to a reduction in consumption, justifying the use of the duties in combating obesity and other health issues, its authors say.
The 2017 decision by city officials in Philadelphia to impose a beverage tax on sugary and artificially-sweetened drinks caused sales to drop by 38 percent, according to a study published Tuesday.
Philadelphia is one of seven US cities to have enacted the measure in recent years, along with France, Mexico and other jurisdictions.
Starting January 1, 2017, the East Coast city of 1.6 million people began adding a tax of 1.5 cents per ounce on all sweetened drinks, including “diet” sodas.
Researchers used Baltimore, where the tax was not imposed, as a control because of its similar socio-demographic and health profile.
The study, published in the Journal of the American Medical Association (JAMA), found that Philadelphia shops passed on the additional costs to consumers, either in whole or in part, leading to a 51 percent reduction of sales within the city.
Areas bordering the city that were not affected by the tax saw a bump in sales, but after accounting for this effect, the net fall in sales was estimated at 38 percent on year.
For co-author Christina Roberto, the numbers confirm a foundational economic theory: if the price of a product goes up, fewer people will buy it.
“Taxing sugar-sweetened beverages is one of the most effective policy strategies we have to reduce purchases,” said the assistant professor of health policy at the University of Pennsylvania, adding it was a “public health no-brainer.”
The overall goal is to achieve better health outcomes: reduction of obesity, cavities and diabetes — markers the researchers did not measure in this study.
But they believe that reducing the intake of added sugars is a step in the right direction.
In the United States, children consume 17 percent of their calories from added sugars instead of the recommended 10 percent, with half of those sugars coming from drinks.
Children from lower-income families, and black children and teenagers, were more likely to consume fruity or sugary drinks than those from higher-income or white families.
“Current evidence is already sufficient to move forward with adoption of taxes while continuing to monitor outcomes,” wrote a group of public health experts in an editorial published by JAMA.
Reacting to the paper, the American Beverage Association criticized the tax, saying it “hurt working families, small local business and their employees.”