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U.S. Soda Taxes Work, Studies Suggest — But Maybe Not As Well As Hoped

Feb 21, 2019
Originally published on February 21, 2019 8:41 pm

This week, the governor of Connecticut proposed a statewide tax on sugar-sweetened drinks. Several cities have already enacted such soda taxes to raise money and fight obesity. And there's new evidence suggesting that these taxes do work — although sometimes not as well as hoped.

Kris Madsen, an associate professor of public health at the University of California, Berkeley, is one of the researchers who has been studying soda taxes, in part because she's convinced that sugary drinks are a menace to society, a direct cause of obesity.

"It's a pretty high bar for public health to be able to say that something is causing a major epidemic," she says. "We can do that for sugar-sweetened beverages."

Berkeley was the first U.S. city to tax those drinks, making them more expensive, and Madsen is leading a team of researchers that's trying to see how the tax is working.

"We've been going out to the same neighborhoods every year for the last five years, and we've been asking people the same questions," she says. Researchers interview people on the street, primarily in low-income neighborhoods.

They started doing this before the soda tax went into effect four years ago, and they've continued every year since.

"We saw a 52 percent decline in consumption over the first three years" since the tax went into effect, she says. "This has a huge impact."

Madsen's study was published online this week by the American Journal of Public Health.

Memories, of course, aren't totally reliable; also, it's possible that people in Berkeley may be underestimating their consumption because they don't want to admit that they're still drinking lots of soda.

Other researchers, meanwhile, are trying to quantify the impact of soda taxes by looking at sales data from retail establishments, including grocery stores and convenience stores.

Anna Tuchman, at Northwestern University, is part of a group studying Philadelphia's soda tax. Philadelphia's tax is different from the one in Berkeley. It's bigger, and it also covers both beverages sweetened by sugar and drinks containing low-calorie sweeteners. This is partly because the goal of the tax is largely to raise more money for schools and playgrounds.

Tuchman says that sales of those drinks in Philadelphia have dropped sharply, by 46 percent, since the tax went into effect.

But there's a catch. "We find a very large increase in sales of soda and other taxed products at stores that are located zero to four miles outside the city," she says.

Basically, it seems that a lot of people in Philadelphia are driving to stores right outside the city to buy their beverages. This is especially true in the case of sugar-sweetened drinks (and less so of artificially sweetened drinks). When you take that into account, sales in and around the city dropped about 20 percent, not 46 percent. And sales of sugar-sweetened drinks fell even less.

This gets in the way of both of the city's goals for its soda tax. "People are able to maintain their sugar and calorie intake, and the city is falling short in their ability to raise tax revenues," Tuchman says.

Tuchman and her colleagues are still revising their paper; it hasn't been formally reviewed by other scientists yet. Right now, though, it does show some of the difficulties that cities face with their soda taxes.

There are political obstacles as well. The soda industry has been fighting back, arguing that soda taxes are unfair to consumers and won't really make people healthier. In fact, it recently strong-armed California's legislature into reluctantly passing a moratorium on further soda taxes by cities in that state.

San Francisco and Oakland, Calif., however, have soda taxes already in place, and Seattle implemented one at the beginning of 2018.

Soda tax advocates, meanwhile, say that there's a simple way to keep people from avoiding the tax by going outside the city: Just pass a tax that covers an entire state — or maybe even a whole country.

Mexico, in fact, put in place a tax on sugar-sweetened beverages in 2014. That tax is smaller than the soda taxes in the U.S., and its effect on consumption also has been smaller. According to one study, consumption of sugary drinks fell on average by about 8 percent as a result of the tax.

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AUDIE CORNISH, HOST:

The governor of Connecticut is proposing the first statewide tax on sugar-sweetened drinks to raise money and to fight obesity. Several cities have already enacted such soda taxes, and there's new evidence this week suggesting that they do work but sometimes not as well as hoped. NPR's Dan Charles has the story.

DAN CHARLES, BYLINE: The way Kris Madsen sees it, sugary drinks are a menace to society. She teaches public health at the University of California, Berkeley.

KRIS MADSEN: It's a pretty high bar for public health to be able to say something is causing a major epidemic. We can do that for sugar-sweetened beverages.

CHARLES: Berkeley was the first city to tax those drinks, and Madsen is leading a team of researchers that's trying to see how it's working.

MADSEN: We've been going out to the same neighborhoods every year for the last five years, and we've been asking people the same questions.

CHARLES: Like, how often do you drink sugar-sweetened drinks? They did this before the soda tax went into effect three years ago and every year since, focusing on low-income neighborhoods.

MADSEN: And we saw a 52 percent decline in consumption over the first three years.

CHARLES: 52 percent.

MADSEN: Yeah, so this has a huge impact.

CHARLES: Her study appears this week in the American Journal of Public Health. Now, a couple of cautions - people's memories aren't totally reliable, and maybe people in Berkeley just don't want to admit they're still drinking lots of soda. Other researchers who are studying soda taxes are not relying on people's memories. They're looking at sales data from stores.

Anna Tuchman at Northwestern University is part of a group studying Philadelphia's soda tax. Philadelphia is taxing more drinks, both sugar-sweetened and diet versions, because its main goal is raising more money for schools and playgrounds. Tuchman says sales of those drinks in Philadelphia have dropped since the tax went into effect by a lot - more than 40 percent. But there's a catch.

ANNA TUCHMAN: We find a very large increase in sales of soda and other taxed products at stores that are located zero to four miles outside of the city.

CHARLES: It seems that a lot of people in Philadelphia are driving to stores right outside the city to buy their beverages, especially the sugary drinks, not so much the diet soda. When you take that into account, sales in and around the city drop by about 20 percent, not 40 percent. And sales of sugar-sweetened drinks fell even less.

TUCHMAN: It's like people are able to maintain their sugar and calorie intake, and the city is falling short in their ability to raise tax revenues.

CHARLES: Tuchman and her colleagues are still revising their paper. It hasn't been formally reviewed by other scientists yet. Right now, though, it does show some of the difficulties that cities face with their soda taxes. There are political obstacles, too. The soda industry has been fighting back, arguing that soda taxes are unfair to consumers and won't really make people healthier. But more places have implemented them - Oakland, San Francisco, Seattle. And soda tax advocates say there's a simple way to keep people from avoiding the tax by going outside the city. Have a tax that covers an entire state or country. Dan Charles, NPR News. Transcript provided by NPR, Copyright NPR.