Reduced sugar consumption projected to improve health
High consumption of sugar-sweetened beverages (SSBs) predicts increased risks of type 2 diabetes and obesity, among other negative health outcomes. Researchers at Columbia University and the University of California – San Francisco used the Coronary Heart Disease Policy Model to estimate the effect of a nationwide 1 cent-per-ounce tax on SSBs on health and medical care spending. Such a tax would reduce consumption of SSBs by 15 percent among adults ages 25-64. During 2010-20, the tax was estimated to prevent 2.4 million person-years of diabetes, 95,000 coronary heart events, 8,000 strokes, and 26,000 premature deaths, while avoiding more than $17 billion in medical costs. This study showed that a modest tax on SSBs could reduce the adverse health effects and cost burdens of obesity, diabetes, and cardiovascular diseases.
A sugar-sweetened drink tax could save money
Over the past several decades, several countries, US states, and cities have levied taxes on SSBs. Taxing these unhealthy drinks might reduce their consumption, much like taxes on cigarettes led to decreased prevalence of smoking. Researchers developed a simulation model to determine if a national excise tax on sugar-sweetened beverages (imposed on manufacturers) would lead to lower consumption, lower subsequent risks of obesity for different age groups of males and females, reduced medical costs, and increased quality of life years over a 10-year period from 2015-2025. The model predicted that sugar-sweetened beverage consumption would decline by 20 percent, while body-mass index would decline by 0.16 point for youth and by 0.08 point for adults. The model also predicted that the SSB tax would gain 871,000 quality-adjusted life years. The 10-year cost of the beverage tax was estimated at $430 million but would reduce medical care costs by $23.6 billion, for an impressive benefit/cost ratio of 55/1. Thus, the sugar-sweetened beverage tax would save medical care money over 10 years. The study authors noted that the beverage industry would strongly oppose such as tax.
Societal benefits of a soda tax
Researchers at Harvard and Tufts in Boston used a micro-simulation model (CVD PREDICT) to estimate cardiovascular disease reductions, quality-adjusted life-years gained, and cost-effectiveness of a SSB tax. The researchers also estimated the extent to which people in 6 insurance categories and the beverage industry, government, and private-sector payers would benefit or not from the tax. The beverage tax was assumed to be one cent per fluid ounce, with either the entire amount or half of it passed on to purchasers. The benefits of a SSB tax arose from reduced incidence of various cardiovascular diseases and the associated medical costs. The model estimated that a SSB tax would be cost-saving, meaning that it would generate more benefits (lower medical care costs, more quality-adjusted life years) than costs (cost of implementation, direct cost to purchasers). The biggest health beneficiaries of the tax would be persons with no health insurance. While the direct cost of the tax would fall disproportionately on low-income persons, the benefits of the tax would accrue disproportionately to these same persons. Both the medical care industry and society would benefit greatly from the tax due to better health and reduced medical care costs. For the beverage industry, the cost would be relatively small if the entire tax were passed on to purchasers over several years and if purchasers switched to other types of packaged drinks. From a public health perspective, a sugar-sweetened beverage tax seems like a no-brainer.
A tiered sugar tax might incentivize the beverage industry
Sugar-sweetened beverage taxes in the US have been initiated in 7 cities. All these taxes are based on the volume of the purchased taxable beverage, such as 1 cent per fluid ounce. Researchers in Boston evaluated the health impact and cost-effectiveness of three versions of a SSB tax: 1) volume based at 1 cent per fluid ounce, 2) tiered with no tax for less than 5 g of sugar per 8 ounce serving, 1 cent tax per ounce for 5-20 grams of sugar per 8 fluid serving, 2) a 2 cent tax per fluid ounce for more than 20 grams of sugar per 8 fluid ounce serving; and 3) absolute sugar content calculated at 1 cent tax per 4 grams of sugar per container. The researchers used a validated microsimulation model, Cardiovascular Disease Policy Model for Risk, Events, Detection, Interventions, Costs, and Trends, to estimate health impacts and cost-effectiveness. Importantly, the simulation included Americans aged 35-80 years and did not include younger adults and children. The tiered and absolute sugar content taxes produced double the health benefits and greater cost-savings than the volume-based tax. Cost-saving means that the taxes would lead to lower health-related costs compared to no SSB tax. In addition, the health benefits would accrue disproportionately to younger adults, blacks, Hispanics, and lower-income Americans. The tiered sugar tax might incentivize manufacturers to reduce the sugar concentration of their beverages to qualify for the next lower tier, thereby reducing the tax by 1 cent per ounce. A national SSB tax could reduce the consumption of added sugar and reduce medical care costs in America.
Has the sugar-sweetened drink tax in Oakland worked?
Oakland, California, instituted a SSB tax of one cent per fluid ounce on July 1, 2017. While the cost of SSBs increased by 14 percent after the tax, reports of SSB purchases and consumption are mixed. A recent study evaluated the cost-effectiveness of the SSB tax from its inception through December 2019. Nearby Richmond, California (which did not have a SSB tax), was used as the comparator city. The micro-simulation study found that SSB purchases declined by 27 percent (about 1.3 ounces per person per day) following the tax implementation compared to Richmond. Purchases of untaxed beverages or sweet snacks did not increase in Oakland post-taxation, nor did purchases of SSBs in border areas. The reduced SSB consumption and reduced risks of chronic diseases linked to excessive sugar intake were estimated to add 94 quality-of-life years per 10,000 persons over 10 years and would save an estimated $102,154 in avoided medical care costs over 10 years. While the SSB tax would make such drinks more expensive in Oakland, that cost would be more than offset by reduced medical costs.
New evidence that taxes reduce consumption of sugar-sweetened drinks
Sugar-sweetened drinks may occupy to top spot in unhealthy things to eat. SSB consumption is linked to increased risk of chronic diseases such as type 2 diabetes, obesity, and cardiovascular disease. As of 2024, 8 cities in the US and more than 50 countries had implemented some form of tax on SSBs. A new study used a novel statistical technique, augmented synthetic control, which allowed the study team to generate relatively unbiased estimates of sugary beverage consumption and prices in 5 US cities (San Francisco; Oakland; Philadelphia; Seattle; and Boulder, CO). Sugar-sweetened beverage consumption and price data from January 1, 2012 to February 29, 2020, for these 5 cities were compared to adjacent areas with no sugary beverage tax. In each city, the consumption of SSBs subject to the tax declined sharply and quickly after the tax was implemented. Over the study period, SSB consumption declined an estimated 33 percent compared to adjacent reference areas. Prices for the taxed drinks rose sharply and quickly following tax implementation. The tax increased the cost of taxed beverages by an average of 1.3 cents per fluid ounce. The average cost of sugar-sweetened beverages rose by 33 percent during the study period, with 92 percent of the cost of the tax passed on to purchasers. The consumption of sugar-sweetened beverages did not increase in adjacent areas where such beverages were not subject to the tax. Thus, sugary beverage taxes might substantially increase the cost of sugar-sweetened beverages and improve the overall health of Americans.
The beverage industry fights back
As might be expected, the beverage industry in the US opposes local taxes on sugar-sweetened drinks. Researchers applied an approach that was used to analyze the tobacco industry’s response to attempts to regulate cigarette use to understand the beverage industry’s tactics to pass state-level preemption laws that outlaw local SSB taxes. It turns out that the beverage industry has used the tobacco industry’s playbook to convince citizens, bureaucrats, and elected officials that SSB taxes are bad for Americans. One tactic involves using front groups (such as Citizen’s For Affordable Groceries) that appear to be driven by local people. Another tactic is making campaign contributions to law makers who serve on important committees or are otherwise able to pass or kill proposed legislation. How about attaching anti-SSB tax legislation to existing bills that are likely to pass through a state legislature? Or how about threats of legal challenges and courting media representatives to present the industry side of SSB taxation using industry narratives? Typically, industry efforts to oppose SSB taxation, especially at a state level, are well organized and funded compared to proponents of SSB taxation. In the State of Washington, the beverage industry outspent SSB tax proponents by 178 to 1 and succeeded in preempting local SSB taxes at the local level. It’s ironic that local attempts to enact SSB taxes that would save money and promote better health are characterized as anti-democratic and detrimental to folks in lower socioeconomic categories.
What to do
It seems to me that sugar-sweetened drinks are similar to alcohol and tobacco. All appear to be addictive, at least to some people, depending how one defines "addictive", and harmful. You’ll probably be healthier if you greatly limit your purchases of sugar-sweetened beverages. Leave them at the store.
