First U.S. sugar tax cuts soft drink sales by 10%

First US tax on sugary drinks

The nation’s first sugar tax (one cent per ounce) in Berkeley, California has led to a decline in soft drink consumption, a new study shows.

And it’s making a lot of health experts very, very happy.

With sugary drink consumption directly linked to an increased risk of obesity, type 2 diabetes, heart disease and possibly heart failure, experts hoped that taxes on sugar-sweetened beverages would curb people from buying unhealthy sugary drinks.

Sales of soft drinks drop nearly 10% in just 1 year

One year after the introduction of the tax on sugary drinks, a study published just this week in PLoS Medicine shows that sales of these products in Berkeley fell by 9.6%, while sales in surrounding areas, where no tax was imposed, rose by 6.9%.

Furthermore, the sugar tax raised $1.4 million for child nutrition and community health programs.

Would spending more curb you from drinking soda?

Wondering how the sugar tax affects daily soda drinkers?

If someone in Berkeley buys a 12-ounce soda, 365 days a year, they are spending a little over $40* more annually due to the new tax.

More people are buying water 

While the research cannot prove a cause-effect relationship between the tax on sugary drinks and increased water consumption, bottled water sales in Berkeley did increase by 15.6% after the introduction of the tax.

Other non-taxed drinks such as unsweetened teas, milk and fruit juices have also seen an uptick in sales, while demand for diet and energy drinks have dropped by 9.2%.

Water and soda
Would you switch to bottled water if soft drinks were taxed? (iStock photos)

Are small businesses suffering due to the sugar tax?

The American Heart Association’s CEO, Nancy Brown, has applauded the tax on sugary drinks and the follow-up study.

In her statement, Brown was sure to address how the tax is affecting local Berkeley businesses.

“Berkeley small businesses have not seen a drop in overall sales. This positive impact is magnified by the fact that the revenue from the tax is being invested in health and wellness across the city.”

And Brown’s statement lined right up with the study’s findings.

Are consumers spending more on healthier options?

Shopkeepers did not lose out because the average grocery bill remained the same and consumer spending has not dropped.

It seems that in general, consumers are shifting away from sugary drinks and are gravitating towards the healthier ones.

Do soda taxes improve Hispanic health?

There are few strategies that have been proven to reduce calorie consumption for the Hispanic community.

But thanks to follow-up studies, we are now seeing that one of the most effective strategies for improving chronic health conditions in Hispanic communities is taxing sugary drinks. It’s showing particular promise both in the U.S. and further south in Mexico.

Effects of sugar-sweetened beverage taxes in Mexico

A recent rigorous analysis published in Health Affairs shows that soda taxes work in Mexico.

Two years after implementation of a peso-per-liter tax in Mexico, consumption of sugary drinks decreased 9.7% and sales of non-sugary drinks increased by 2.1%

Due to the tax, Mexicans are switching to healthier alternatives; especially among lower-income families who have little wiggle room for getting sick.

A soda tax that makes health and economic sense

The reduction in sugary beverage consumption in the U.S. and abroad could result in hundreds of thousands of fewer cases of diabetes and tens of thousands fewer strokes, heart attacks and deaths.

If a soda tax stuck nationally as it has in Mexico, it could mean savings billions in health care expenditures.

*Editor’s note: A former version of this article read that the extra cost of soft drinks with the tax inclusion was $400. We have corrected it to reflect the real cost of $43.80.

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