To What Extent is the Sugar-Sweetened Beverage Tax an Effective Government Intervention Towards Public Health? Reviewing Discrepancies Between Sales and Consumption

Abstract:

The overconsumption of sugar-sweetened beverages (SSBs) is associated with the increasing prevalence of obesity and diabetes in the United States. Obesity is a contributing factor to many diseases such as diabetes mellitus, ischemic heart disease and hypertension, all of which place significant pressure on the country’s health care system. These diseases have also led to substantial economic costs in the form of medical expenses and productivity losses. To address the continuing increase of obesity rates, in January of 2017, the city of Philadelphia implemented a $0.015/ounce tax on SSBs and diet beverages in an effort to decrease the consumption of SSBs and shift towards healthier options. The tax includes any non- alcoholic beverage that lists sugar as an ingredient, or that lists any other type of sweetener as an ingredient. The sugar tax covers SSBs intended for resale in Philadelphia. The tax is imposed only when the supply, acquisition, or transport of a sweetened beverage is for the purpose of the Dealer’s retail sale within the City of Philadelphia. This study evaluates the effectiveness of the tax by looking into the discrepancies between sales and consumption. After the implementation of the tax, sales of SSBs in Philadelphia dropped from approximately 190 million ounces to approximately 100 million ounces just 3 months after the tax was implemented. However, although there was a decrease in sales after the implementation of the tax, consumption of SSBs did not decrease by a corresponding amount. A study that compared the changes in volume of SSBs consumed before and after the tax reported a difference of only -51.65 ounces in a 30-day period. This showed that the changes in the 30-day consumption volume were not statistically significant. Other reasons behind this discrepancy can be attributed to product alternatives and cross-border shopping – sales of SSBs increased by approximately 40 million ounces in the city of Baltimore. This study is also one of few that look into the beverage industry’s response and role in countering the sugar-sweetened beverage tax. Lobbying and aggressive marketing and advertising by beverage companies also helps explain the discrepancies between the reported decrease in sales and consumption of sugar sweetened beverages.