Berkeley’s Soda Tax Just Killed the Soda Industry
Its future has been questionable for some time as sales of soda and other sugary beverages continue to decline. But it’s the residents of Berkeley, Calif., the small university town near San Francisco and Oakland, that may have just given the soda industry its eviction notice. Berkeley was the first city in the country to enact a tax on sodas in 2014, which went into effect earlier this year. And, it seems, it’s working incredibly well.
Just five months into the tax—a penny per ounce—that city is reporting a whopping 21 percent decrease in soda sales.
“[N]eighboring Oakland and San Francisco increased the amount of sugary drinks consumed by 4% during the same period,” reports the Los Angeles Times.
The findings were published in the recent issue of the American Journal of Public Health.
According to the research, Berkeley residents didn’t just ditch the soda for other sugary beverages like tea or juice—they’re opting for water instead, which showed a 63 percent increase in sales in the same time period. Low-income residents—often the target market for sodas—increased their water consumption by 19 percent.
The tax isn’t added on at time of purchase like a sales tax, but factored into the cost of goods, making the price visibly higher at the shelf, rather than at the register.
“The results provide strong evidence that the sin taxes that helped steer consumers away from alcohol and tobacco products can also work on sugary drinks such as soda,” Dr. Kristine Madsen, a public health researcher at UC Berkeley and senior author of the study explained to the Times.
“While Berkeley is just one small city, this is an important first step in identifying tools that can move the needle on population health,” Madsen said in a statement.
Earlier this year Philadelphia passed legislation that would make it the largest U.S. city to enact a soda tax, and dozens more are considering similar measures. A proposed tax in San Francisco was recently rejected, but the city is poised to try to pass through another measure.
Consumption of sugary beverages such as soda and other sweetened soft drinks has been linked to an increased risk of becoming obese and developing type 2 diabetes.
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Drinking soda image via Shutterstock
