Soda Taxes Work

Is the soft drink industry finally fizzling out?

Soda taxes work
Credit: Photo by Jonny Caspari on Unsplash

Berkeley, Calif., became the first U.S. city to pass a soda tax in 2014. Since then, major cities have followed including Philadephia, Chicago, San Francisco, Oakland, Portland, and Seattle. And it appears that they’re working.

Months after Berkeley enacted its tax, consumption of sugar-filled drinks dropped 21 percent. “Three years later, it dropped even more,” reports Fast Company. “Residents report drinking 52 percent fewer sugary drinks than they did before the tax passed.”

The numbers come from a study published in the American Journal of Public Health. It looked at the consumption habits of 2,500 consumers in the San Francisco, Oakland, and Berkeley areas. 

People were skeptical about the soda tax–beverage industry influence is strong. Pepsi and Coca-Cola each spend more than $3 billion a year in advertising. That’s not just television commercials or billboards but point-of-sale placement as well to help sway a customer in the store toward the sugary drinks.

Consumption of soda and other sugar-sweetened beverages has been linked to a growing number of health issues. It’s a habit linked to increased risks of obesity and type-2 diabetes, but it’s also linked to heart disease and even some forms of cancer.

Tack on the ubiquity of the products and the price — sodas can be less expensive than bottled water — and it’s no wonder the U.S. has a massive soda problem. Former New York City mayor Michael Bloomberg tried repeatedly to pass a city-wide ban on sodas that would limit serving sizes in an effort to combat the city’s obesity epidemic. It says a lot about the impact of sugary drinks, especially in a city where people walk about twice as much as the national average daily. 

But where bans won’t fly (the 2013 proposed NYC ban was shut down by a court of appeals in 2014), taxes seem to be the next best thing.

There is, of course, precedent for this: tobacco sales have steadily declined in recent decades as a result of taxes, label warnings, and consumer awareness campaigns.

Now, California may try to take it a step further and enforce a ban on excessively large soft drinks like the 7-Eleven Big Gulp. It would also require moving soda cases from checkout counters. 

Despite the efforts of the soda industry to remain in the public eye, research like this new study and the proven results of soda taxes may make the case for partial bans like California’s proposed rule.

“What’s really interesting is the United States is actually pretty far behind,” Kristine Madsen, faculty director of the Berkeley Food Institute in UC Berkeley’s School of Public Health and senior author of the new study told Fast Company. 

There’s another factor too that may help sway consumers away from sugary drinks. The same target markets the soda companies are desperate for — Millennials and Gen Z — are also the consumers most interested in an evolving food system. They’re to blame for the steady decline of sugary and diet soft drinks in recent years and subsequent spikes in functional beverages — the less sweet kombucha, apple cider tonics, and even the newest trend on the block, CBD-infused beverages.

“Consumer analytics provider Connexity says that soda brands are failing to win over the 18 to 24 demographic, despite new strategies designed to appeal to a younger, more health-conscious crowd,” reports New Media and Marketing. “With the media spotlight turned firmly on sugar, following the implementation of a government tax in many countries across the world – such as Saudi Arabia, where they imposed a 50 percent tax on sugary drinks in June – many consumers around the world are seeking healthier alternatives.”

Still, curbing soda consumption is an uphill battle. But there are small victories proving that winning the battle may be close.

“Britain has a tax now, Ireland has a tax, Australia has a tax, many Middle Eastern countries now have a tax, some as high as 100%–they’re doubling the price of sugar-sweetened beverages,” Madsen said. “They all see the link between the health of their economy and the health of their population and recognize that obesity is killing their people and they need to do something about it. And they’ve been far more proactive than we have.”

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