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Sugary drinks hit due to soda tax

21 April 2017

Berkeley was the first USA city to implement a sugary drink tax, an excise tax on beverage distributers, which went into effect in early 2015.

Sales of sugary drinks in one area dropped nearly ten per cent after a one cent per ounce tax hike, suggesting sugar taxes actually work.

Sales of sugar-sweetened beverages dropped almost 10 percent during the first year of the tax, which raised US$1.4 million for child nutrition and community health programs, a new study showed.

With other jurisdictions set to follow on soda taxes, the authors of the study say the Berkeley tax offers the first opportunity to evaluate the policy, and their study considered the first year of implementation (March 2015 - February 2016). "Any reduction in the consumption of sugary drinks is an added benefit of the proposed tax". Proponents of the tax have said that its primary goal was to reduce consumption of sugary drinks as a way to fight diabetes, obesity, tooth decay and other health problems that disproportionately affect minority people, many of whom are poor.

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Last year, other USA municipalities - including Philadelphia, San Francisco, Oakland and Cook County, Illinois, which includes Chicago - approved laws to tax sugary beverages. In January 2014, Mexico implemented a nationwide one-peso-per-liter tax on sodas.

"The findings of this study, while limited by its observational design, suggest that SSB taxes may be effective in shifting consumers to purchase healthier beverages without causing undue economic hardship and while raising revenue for social objectives", they concluded. He urged policymakers and voters in cities and counties without soda taxes to review the study and press for similar measures. The report said the American Beverage Association has contributed at least $800,000 to oppose the tax, and former New York Mayor Michael Bloomberg has provided more than $320,000, mostly for media buys, to support the tax.

Dr. Tom Farley, the city health commissioner, noted that the tax could also lower the rate of deaths from diabetes in Philly.

Sales of water increased by 15.6 per cent post tax and sales for other non-taxed drinks such as unsweetened teas, milk and fruit juices also rose.

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Silver said that when she was training to become a pediatrician in the 1980s, she never saw a child with type 2 diabetes, which used to be called adult-onset diabetes.

According to Forbes, Illinois could extend the tax at state level, while "initiatives may start bubbling in other California cities and Santa Fe, New Mexico".

The study found that the volume of sugar sweetened beverages sold in Berkeley declined by 9.6% in the year following implementation; sales of healthier beverages rose (meaning there was no negative impact on overall beverage sales); and overall grocery bills (consumer spending per checkout) did not go up.

Absolute sales of all beverages, including SSBs, actually increased by about 1% after the tax, but the researchers came up with the 9.6% figure by estimating what SSB sales would have been if the tax were not in place, based on pre-tax trends.

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Sugary drinks hit due to soda tax