Berkley’s penny-per-ounce soda tax paid off, a new study reports

An analysis of Berkeley’s “soda tax,” an U.S. first, finds some encouraging results about its power to influence people’s dietary habits.

The fizziest of killers.
Image credits Eddie Welker / Flickr.

Back in 2014, the city of Berkeley, California, passed a bill to issue a one penny-per-ounce tax on all sugar-sweetened beverages sold in the city. Five months after its implementation, lower-income residents had reduced their consumption if these items by 21% compared to pre-tax levels. The drop in consumption coincided with a period when the people of Oakland and San Francisco increased the amount of sodas and other sugared drinks that they consumed by 4%. Locals also increased their water consumption by 63% over the study period while their neighbors only drank 19% more water, the study found.

Soda taxes have worked in Mexico, they’ve been implemented in the UK, and now their efficacy has been confirmed once more. The Berkeley study proved that taxes can be used to steer people away from excessively sugary drinks, just as with tobacco or alcohol, said a public health researcher at UC Berkeley and senior author of the study Dr. Kristine Madsen.

“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.

Some two dozen states have considered adding excise taxes on sugary beverages in the past, including Baltimore, Chicago, Philadelphia, San Francisco and Washington, D.C., reported the Rudd Center for Food Policy and Obesity at the University of Connecticut. But Berkeley was the first to actually implement Measure D in 2014 after a campaign framed as “Berkeley vs. Big Soda.

An excise tax won’t show up at the register, and instead gets mixed into the full price of the item. This means higher prices for the consumer, and three months after Measure D went into effect 47% of the penny-per-ounce tax was taken out of customers’ pockets. For sodas in particular, 69% of the tax was incorporated into the price.

Madsen and her team wanted to know how the tax impacted buying habits so they sent interviewers to busy intersections in census tracts with large numbers of low-income and non-white residents. The focus was placed on these groups as they are “more likely to consume [sugar-sweetened beverages] and suffer related health consequences,” such as obesity, diabetes and heart disease, the researchers wrote. The interviewers asked locals in Berkeley, Oakland and San Francisco how often they consumed five categories of drinks:: full-calorie soda, sports drinks, energy drinks, fruit drinks and sweetened tea or coffee concoctions.

The first set of interviews was taken at least eight months prior to the tax coming into effect, to establish the initial conditions. The second was taken five months after implementation. Nearly 3,000 people answered the questions in either English or Spanish.

After controlling for age, gender, race, ethnicity and education level, the researchers found that Berkeley locals had strikingly different drinking habits from those in Oakland or San Francisco. They drank 26% less soda after the tax went into effect, while their neighbors drank 10% more. In the case of sports drinks, Berkeley residents cut back by 36%, while Oakland and San Francisco drank 21% more. Both of these differences are large enough to be statistically significant, the authors note. These trends held for other categories, too. Arizona Iced Tea, bottled Frappuccinos and other sweetened coffee products or teas were 13% less consumed in Berkeley but 22% more consumed in Oakland and San Francisco.

Energy drink consumption dropped all in all cities, but was more pronounced in Berkeley with 29% than in the other cities, at 14%. Fruit drink consumption was lowered by 13% in Berkeley and 12% in the other cities.

More than  20% of Berkeley residents (124 in total) reported that the tax directly affected their drinking habits. Out of these, 82% said they consumed sugary drinks less frequently, and 40% said they had reduced their portion sizes. About 5% of people who said they had purchased sugary drinks in Berkeley before the tax went into effect (18 respondents) reported they now bought these drinks in other cities, and 6 claimed that the tax caused the switch.

The team didn’t calculate what this reduction means in terms of calories, so the policy’s effect on obesity remains unknown. They also noted that the health messages discussed during the election campaign may have had an effect on the shift from sugary drinks to water.

At the same time, because this was tested in a single city, it remains unclear how the results would carry over to a wider scale of several cities or even whole states. But if a nationwide tax were to cut sugary drink consumption by a similar amount, Americans as a whole could gain about 101,000 healthy years over a decade, according to another study cited by the researchers.

“Widespread adoption of [sugar-sweetened beverage] excise taxes could have considerable fiscal and public health benefits,” the authors conclude.

The full paper, titled “Impact of the Berkeley Excise Tax on Sugar-Sweetened Beverage Consumption” has been published online in the American Journal of Public Health.

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