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Sugar-Sweetened Beverage Taxes Cut Sales by 15%

— However, evidence of tax undershifting was apparent

MedpageToday
A photo of a tag on a shelf of soda in a Dollar Tree store explaining the beverage tax.

Sugar-sweetened beverage (SSB) taxes were effective at stifling sales, according to a systematic literature review commissioned by the World Health Organization.

Among 62 studies included in a meta-analysis, SSB taxes were fairly effective at bumping up the price of the targeted beverages -- with a tax pass-through rate of 82% (95% CI 66-98, P<0.001, I2=99%), reported Tatiana Andreyeva, PhD, of the University of Connecticut in Hartford, and colleagues.

"That is, a 10%-equivalent SSB tax was estimated to increase consumer prices of taxed beverages by 8.2%, suggesting an incomplete pass-through and tax undershifting," the group pointed out in .

In an , Christina A. Roberto, PhD, of the University of Pennsylvania in Philadelphia, and colleagues noted that tax advocates have recommended implementing SSB taxes at either the national or state level -- not city level -- in order to push back on the chances of tax avoidance seen here.

But even with this slight absorption of the SSB tax, there was a significant drop in demand for these beverages due to the increased price. Across the included studies, the estimate for price elasticity for SSB sales dropped by 1.59 (95% CI -2.11 to -1.08, P<0.001, I2=100%). This yielded a 15% (95% CI -20 to -9, P<0.001, I2=100%) average drop in SSB sales.

The researchers also saw a trend toward an 18% decline in SSB consumption as a result of the decreased sales, though this didn't reach statistical significance. However, this may have been due to the fact that 75% of consumption studies included in the analysis were graded as "low quality."

Despite this drop, Andreyeva's group didn't find any evidence of substitution in regards to sales of untaxed drinks. And interestingly, several studies indicated a drop in total grocery sales, as well.

Not surprisingly, when it came to local U.S. SSB taxes, the majority of the studies saw a significant spike in cross-border shopping.

"When such substitution is not observed, it could mean consumers replace SSBs with tap water or do not replace them at all," the commentators explained, adding that "some consumers may substitute SSBs for liquid and powder beverage concentrates, which are excluded from most taxes even though they are used to make sugary drinks."

While other factors certainly play into the risk for chronic diseases related to dietary sugar, like diabetes and obesity, Roberto's group said that "improving dietary choices is a worthy goal in and of itself."

"Jurisdictions that consider implementing these taxes should continue to design them in consultation with lower-income and marginalized communities," they advised. "These communities may bear the short-term burden of the tax, even if they reap longer-term benefits, so it is especially important that the revenue is reinvested in ways that support their social and economic needs."

For the analysis, Andreyeva and colleagues sifted through global peer-reviewed studies from eight databases. Most studies looked at local, state, or regional SSB taxes in the U.S., but some non-U.S. studies looked at national taxes, including in Mexico, the U.S., and France, among others.

The authors noted that there was no evidence of publication bias among studies looking at prices and sales.

  • author['full_name']

    Kristen Monaco is a senior staff writer, focusing on endocrinology, psychiatry, and nephrology news. Based out of the New York City office, she’s worked at the company since 2015.

Disclosures

The study was funded by the World Health Organization.

Andreyeva and co-authors reported no disclosures.

Commentary authors Gibson and Roberto reported grants from Bloomberg Philanthropies.

Primary Source

JAMA Network Open

Andreyeva T, et al "Outcomes following taxation of sugar-sweetened beverages: a systematic review and meta-analysis" JAMA Netw Open 2022; DOI: 10.1001/jamanetworkopen.2022.15276.

Secondary Source

JAMA Network Open

Petimar J, et al "Evaluating the evidence on beverage taxes: implications for public health and health equity" JAMA Netw Open 2022; DOI: 10.1001/jamanetworkopen.2022.15284.