SignalHub-Cities with soda taxes saw sales of sugary drinks fall as prices rose, study finds

Sales of sugary drinks fell dramatically across five U.S. cities,SignalHub after they implemented taxes targeting those drinks – and those changes were sustained over time. That's according to a study published Friday in the journal JAMA Health Forum.

Researchers say the findings provide more evidence that these controversial taxes really do work. A claim the beverage industry disputes.

The cities studied were: Philadelphia, Seattle, San Francisco and Oakland, Calif., and Boulder, Colo. Taxes ranged from 1 to 2 cents per ounce. For a 2-liter bottle of soda, that comes out to between 67 cents to $1.30 extra in taxes.

While prior studies have looked at the impact of soda taxes, they usually studied one city at a time. This new study looked at the composite effect of the taxes in multiple cities to get an idea of what might happen if these taxes were more widespread – or scaled to a state or national level, says Scott Kaplan, an economics professor at the U.S. Naval Academy and the study's lead author.

Kaplan and his colleagues found that, on average, prices for sugar-sweetened drinks went up by 33.1% and purchases went down by basically the same amount – 33%.

"In other words, for every 1% increase in price, we find that purchases fall by about 1%," says Kaplan.

So when people had to pay more for sugary drinks, they reduced their purchases – and the effect was large and sustained.

But are people simply buying their sugary drinks elsewhere where it's cheaper?

Kaplan notes, prior research findings on that question have been contradictory. Some studies that focused on Philadelphia's sugary drink tax have found that, while sales of sugary drinks dropped significantly in the city, they actually went up in surrounding areas – indicating people were traveling to avoid the taxes. Other studies have found no such changes. In the new study, Kaplan and his colleagues didn't find evidence that consumers were traveling to make cross-border purchases.

Jennifer Pomeranz, an associate professor at the School of Global Public Health at New York University, says taxes that target sugary drinks are good public health policy because these drinks have no nutritional value, but they are linked with diet-related diseases.

As Kaplan notes, "sugar sweetened beverages make up a quarter of all the added sugar we see in the average adult American diet. And that's a really big amount."

Too much added sugar is linked to a host of poor health outcomes, including diabetes, obesity and heart disease. Sugary drink taxes are designed to discourage purchases to curb consumption.

In 2019, both the American Heart Association and the American Academy of Pediatricians officially endorsed soda taxes as a good way to reduce the risks of childhood obesity. And just last month, the World Health Organization called on countries to increase taxes on sugary drinks as a way to promote healthier diets.

While the U.S. saw a handful of major cities pass these taxes starting about a decade ago, the soda industry poured millions of dollars into fighting those efforts. In some states, opponents passed laws that basically stripped localities of the power to be able to pass soda taxes, and the movement basically stalled, says Pomeranz. The new findings are "great," she says of the new study. "I am thinking it could renew interest."

In a statement to NPR, the American Beverage Association said that the industry's strategy of offering consumers more choices with less sugar is working, noting that nearly 60 percent of beverages sold today have zero sugar.

"The calories that people get from beverages has decreased to its lowest level in decades," the ABA said. The industry group said that sugary drink taxes are unproductive and hurt consumers.

This story was edited by Jane Greenhalgh