Taxes on sugary drinks (SSB) have been effective in stifling sales, according to a systematic review of the literature commissioned by the World Health Organization.
Among 62 studies included in a meta-analysis, taxes on sugary drinks were quite effective in driving up the price of targeted drinks — with a tax pass-through rate of 82% (95% CI 66-98, PI2= 99%), reported Tatiana Andreyeva, PhD, of the University of Connecticut at Hartford, and her colleagues.
“That is, it was estimated that an equivalent SSB tax of 10% would increase consumer prices of taxed beverages by 8.2%, suggesting incomplete pass-through and fiscal under-transfer. “, underlined the group in Open JAMA Network.
In a accompanying commentaryChristina A. Roberto, PhD, of the University of Pennsylvania in Philadelphia, and her colleagues noted that tax advocates have recommended implementing SSB taxes at the national or state level — not at the state level. the city – in order to fend off the risks of tax avoidance seen here.
But even with this slight absorption of the SSB tax, there has been a significant drop in demand for these drinks due to the increase in prices. Across all included studies, the estimated price elasticity of SSB sales fell from 1.59 (95% CI -2.11 to -1.08, PI2=100%). This gave a 15% (95% CI -20 to -9, PI2=100%) average drop in SSB sales.
The researchers also found a trend of an 18% drop in sugar-sweetened beverage consumption due to lower sales, although this did not reach statistical significance. However, this may be due to the fact that 75% of the consumer studies included in the analysis were classified as “low quality”.
Despite this decline, Andreyeva’s group found no evidence of substitution with respect to untaxed beverage sales. And interestingly, several studies have also indicated a decline in total grocery sales.
Not surprisingly, when it comes to local taxes on sugary drinks in the United States, the majority of studies have found a significant increase in cross-border purchases.
“When such substitution is not observed, it could mean that consumers are replacing sugary drinks with tap water or not replacing them at all,” commenters explained, adding that “some consumers may substitute sweetened beverages by liquid and powdered beverage concentrates, which are excluded from most taxes while used to make sweetened beverages.
While other factors certainly play a role in the risk of chronic diseases linked to dietary sugar, such as diabetes and obesity, Roberto’s group said “improving food choices is a laudable goal in itself.” .
“Jurisdictions considering implementing these taxes should continue to design them in consultation with low-income and marginalized communities,” they advised. “These communities may bear the short-term burden of the tax, even as they reap longer-term benefits, so it is particularly important that revenues are reinvested in ways that meet their social and economic needs.”
For the analysis, Andreyeva and her colleagues sifted through global peer-reviewed studies from eight databases. Most studies have looked at local, state, or regional taxes on sugar-sweetened beverages in the United States, but some non-US studies have looked at national taxes, including in Mexico, the United States, and France, among others.
The authors noted that there was no evidence of publication bias among studies looking at prices and sales.
The study was funded by the World Health Organization.
Andreyeva and the co-authors reported no disclosures.
Comment authors Gibson and Roberto cited grants from Bloomberg Philanthropies.