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New Study: Sugary Drink Tax Shows Signs of Progress in Berkeley, CA

August 28, 2016

By American Heart Association News

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After adopting the country’s first tax on sugary drinks, consumers in Berkeley, California, are drinking 21 percent less of these beverages, according to a new study released Tuesday.

At the same time, consumption of water in the city increased by 63 percent, compared with a 19 percent increase in neighboring San Francisco and Oakland, which don’t have the tax. The study, published in the American Journal of Public Health, surveyed 2,679 people in low-income neighborhoods across all three cities.

“The goal behind taxes is to influence people’s behavior,” said Kristine Madsen, the study’s senior-author and an associate professor in the University of California-Berkeley’s School of Public Health. “The hope is that people will switch to healthier beverages.”

In November 2014, voters in Berkeley made it the first city in the country to adopt the tax on drinks with added sugars. The measure excludes milk, beverages created for medical use and alcoholic drinks. The 1-cent-per-ounce excise tax is charged to beverage distributors, so for a 20-ounce soda, the tax would be 20 cents. The city began collecting the tax in March 2015.

“In public health, we look for low-cost tools that can help people make healthier choices,” said lead-author Jennifer Falbe, a postdoctoral research fellow at UC-Berkeley’s School of Public Health. “Our study provides encouraging evidence that a tax could be a useful tool to help people reduce their sugary drink intake.”

Falbe, who received funding from an American Heart Association postdoctoral fellowship program, said the study was unable to tease out specifically how much of the drop in consumption was due to higher prices and how much to an increase in awareness.

Madsen and Falbe issued a study last year  that showed 69 percent of Berkeley’s drink tax was passed through to higher soda prices, and 47 percent passed through to prices of sugary drinks overall, which the researchers said was about an 8 percent price increase.

Researchers and advocates have generally said the key ingredient in these sugar-sweetened beverage taxes is how much of the cost is passed on to consumers. In 2012, the Institute of Medicine, a division of the National Academies of Sciences, Engineering, and Medicine, suggested “substantial and specific excise taxes on sugar-sweetened beverages” to encourage people to cut back .

But Falbe and Madsen said the larger conversation, debate and education about beverage taxes may also have a direct impact.

“It may change social norms around what is a healthy drink, which is ideal,” Madsen said. “Industry is encouraged to produce healthier options. … We aren’t excited about a tax because it takes money away from industry; we are excited about a tax because it promotes population health.”

In January, Berkeley’s city council approved spending $1.5 million for community nutrition and health efforts, including school garden programs – with $1.2 million of that total coming from soda tax collections.

AHA Chief Executive Nancy Brown said the study’s results show the taxes can motivate people to drink fewer sugary drinks and more water.

“These results contribute to a growing evidence base in support,” she said, “for passing similar tax measures in cities and states across the United States.”

In fact, the battles over how to limit sugary drinks and sodas have been flaring up all over the country:

  • Philadelphia’s City Council passed a 1.5-per-ounce sugary drink tax this past June.
  • Last summer, the San Francisco Board of Supervisors passed an ordinance restricting ads for sugar sweetened beverages and requiring health warnings on some ads. The ordinance is being challenged in federal court.
  • Berkeley’s neighbors in San Francisco, Oakland and Albany are slated to vote on a penny-per-ounce tax this November. If all three ballot initiatives are successful, the tax would apply to a population of about 1.3 million in the Bay Area.
  • Boulder, Colorado, also is considering a 2-cents-per-ounce tax this fall.

The typical American child takes in about triple the recommended amount of added sugars, half from food and half from drinks, according to researchers. For all Americans, sugary drinks are the primary source of added sugars.

One 12-ounce, cola-flavored soda has more than 36 grams of sugar, according to the United States Department of Agriculture’s National Nutrient Database.

Madsen and Falbe said they will continue to study the impact of the sugary drink tax in Berkeley and hope to have a new report next year.

“This is absolutely sparking a national conversation,” according to Madsen, who said the food and beverage industry spends heavily advertising directly to children.

“Public health doesn’t have those kind of resources, and counseling people and telling them it’s unhealthy isn’t enough,” she said. “In other efforts around tobacco and even alcohol, taxes have been one thing that have been incredibly effective at leveling the playing field.”

Californians for Food and Beverage Choice, a lobbying initiative supported by the drink industry trade group The American Beverage Association, has said drink taxes are a misguided government intrusion.

“Soda taxes can cause people to take their grocery shopping to neighboring communities,” a statement earlier this month said. “Over the long term, this harms small businesses and jeopardizes the jobs they provide. Also, when politicians start taxing common items there is no telling where the taxes will begin and end.”

The study, however, found that only 2 percent of the sampled population in Berkeley reported shopping in stores outside of the city to avoid the tax or higher prices.

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