Berkeley Residents Buying Fewer Sugary Drinks and More Water Thanks to Soda Tax

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Largest-To-Date Evaluation Shows 9.6% Drop In Sugar Sweetened Beverage Purchases And Increase In Healthier Beverage Purchases. Overall Bererage Sales Rose; Grocery Bill Did Not.

April 18, 2017

Oakland, CA — A new study published today in PLOS Medicine by the Public Health Institute and the University of North Carolina showed that Berkeley’s sugar sweetened beverage tax is working as intended.

Top findings included:

  • Purchases of sugary drinks declined: Sales (in ounces per transaction) of taxed SSBs fell by 9.6% in Berkeley, while they rose by 6% in other Bay Area stores without a tax (compared to predicted sales based on pre-tax trends). Sales of diet soft drinks and diet energy drinks also fell significantly, by 9.2%.
  • Purchases of healthy beverages increased: Sales of untaxed healthier beverages, already far greater at baseline, rose significantly, by 3.5%, and overall beverage sales went up in Berkeley. Sales of water rose by 15.6% (more in ounces than the decline in SSBs); untaxed fruit, vegetable or tea drink sales increased by 4.37%; and sales of plain milk rose by 0.63% (all statistically significant).
  • No negative impact on store revenue or consumer grocery bills: Although overall store revenues per transaction in the studied chains dropped slightly across the Bay Area during the study period, store revenues in Berkeley fell by 18¢ less (-$0.36) compared to non-Berkeley stores (-$0.54). This same indicator—store revenue per transaction—is also what consumers spent on average for each checkout or “grocery bill” at the participating stores, indicating that their average grocery checkout bill did not increase at these stores—counter to claims by the soda industry that the policy would be a “grocery tax.”
  • Investments in health increased: In spite of low consumption of SSBs, the City’s revenue from the first year of the SSB tax was $1,416,973—or $12 per capita. Funds raised went to nutrition and obesity prevention activities in schools, childcare and other community settings.
  • The tax costs were passed through to taxed products in many, but not all, stores: In the 15.5 million transaction study, about two-thirds of the penny-per-ounce levy (0.67¢/oz) was passed through to consumers by pricing increases on the taxed drinks. For soda and energy drinks it was fully passed through (1.09¢/oz). In the 26 store study, it was fully passed on in large (1.07¢/oz) and small chain supermarkets and chain gas stations (1.31¢/oz), partially in pharmacies (0.45¢/oz), but not in smaller independent corner stores and independent gas stations. Prices on non-taxed beverages did not increase more in Berkeley than in comparison stores.

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