California – Berkeley Tax Reduces Soda Consumption

SALT Report 3864 – Can Americans tax themselves out of their obesity crisis? A new analysis of Berkeley’s first-in-the-nation “soda tax” offers encouraging results about its power to change people’s dietary habits.

Five months after the city implemented its penny-per-ounce tax on all manner of sugar-sweetened beverages, lower-income residents had reduced their consumption by 21%, compared to the pre-tax days. Meanwhile, their counterparts in neighboring Oakland and San Francisco increased the amount of sugary drinks consumed by 4% during the same period, according to a study published Tuesday in the American Journal of Public Health.

Instead of swilling as much Coke, Gatorade, Red Bull and Hawaiian Punch, the Berkeley residents boosted their water consumption by 63%. In the neighboring cities, low-income residents drank only 19% more water during the study period.

The results provide strong evidence that the sin taxes that helped steer consumers away from alcohol and tobacco products can also work on sugary drinks such as soda, said Dr. Kristine Madsen, a public health researcher at UC Berkeley and senior author of the study.

“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.

About two dozen states have considered excise taxes on sugar-sweetened beverages, as have cities such as Baltimore, Chicago, Philadelphia, San Francisco and Washington, D.C., according to the Rudd Center for Food Policy and Obesity at the University of Connecticut. But Berkeley was the first jurisdiction to pass one. The campaign in favor of Measure D was framed as “Berkeley vs. Big Soda,” and it passed in 2014 with 75% of the vote.

Unlike a sales tax, which shoppers see at the register, an excise tax gets incorporated into the price of an item. Three months after Measure D went into effect, 47% of the penny-per-ounce tax had been passed along to consumers in the form of higher prices for sugar-sweetened beverages, according to a previous study by some of the same researchers. For sodas in particular, 69% of the tax was incorporated into the price.

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