Yes, Soda Taxes Seem To Cut Soda Drinking

A woman shops for frozen foods on an aisle across from sodas and other sugary drinks for sale at a superrmarket in Monterey Park, California on June 18, 2014, a day after a bill in California that would require soft drinks to have health warning labels failed to clear a key committee. Under the measure, sugary drinks sold in the most populous US state would have had to carry a label with a warning that sugar contributes to obesity, diabetes and tooth decay and the legislation, which would have been the first of its kind in the United States, passed the state Senate in May, but on it failed to win enough votes in the health commission of the California State Assembly on June 17, the Los Angeles Times reported. AFP PHOTO/Frederic J. BROWN        (Photo credit should read FREDERIC J. BROWN/AFP/Getty Images)

For about a decade now, policy makers and the soda industry have been fighting about the idea of a big soda tax. Proponents say it would fight obesity by reducing consumption of sugary drinks. A leading objection by the industry is that the tax simply would not work.

Those discussions were largely theoretical, because no big city, state or country had passed the kind of tax that advocates wanted.

That recently changed. In 2013, Mexico passed a tax right out of the public health literature. And now the theoretical debate is becoming more real. Preliminary data from the Mexican government and public health researchers in the United States finds that the tax prompted a substantial increase in prices and a resulting drop in the sales of drinks sweetened with sugar, particularly among the country’s poorest consumers. The long-term effects of the policy remain uncertain, but the tax is being heralded by advocates, who say it could translate to the United States.

“It’s exactly what we thought the tax would do,” said Barry Popkin, a professor of nutrition at the University of North Carolina, whose team conducted the research.

The idea for the soda tax is in some ways modeled on the tobacco taxes passed by states and the federal government over the last few decades. The idea of those taxes was not only to raise revenue — though that was a nice side effect — but also to discourage people from buying cigarettes. A robust literature now exists showing that the resulting higher prices really did push down cigarette sales, particularly among young people.

Similarly, the idea for the soda taxes is that they should be applied to bottlers or retailers, so that the prices show up on price tags, not at the cash register. As with the most effective cigarette taxes, proponents want them to be large enough that customers notice the difference.

The tax in Mexico followed those recommendations. It cost bottlers a peso for every liter of sugar-sweetened drinks, which amounts to about a 10 percent price increase, a substantial jump. Because it was applied to distributors, any resulting increase would show up on list prices.

There are essentially three steps to figuring out whether the tax will have an impact on public health.

■ Does the tax raise the price of soda? In theory, the tax could be absorbed by the bottlers or sellers, so that consumers never feel it. Researchers thought the tax would be fully passed through in the form of higher prices, and in Mexico it was.

■ Do increases in the price of soda actually reduce purchases? The research by the University of North Carolina, conducted with the Mexican public health authorities, found that they did. Over the course of last year, there was an average 6 percent decrease in soda sales, and the effect appeared to intensify as the year wore on. By December 2014, the last year of the study, sales were down 12 percent compared with December 2013. The declines were the biggest for lowest-income Mexicans — as large as 17 percent in December — suggesting that it was the prices, and not publicity around the tax, that was making the difference.

■ Did rates of obesity or diabetes fall? This crucial question remains unanswered. It’s possible, for example, that people who stopped buying soda bought apple juice with a similar number of calories from natural sugar. Or maybe they switched to water but ate a lot more ice cream. There’s some science that shows that liquid calories don’t make people full the same way solid ones do — suggesting that the lost calories won’t be fully replaced. But there’s little research on what happens when you change people’s beverage habits over the long term, so it will take years before we know whether a drop in soda drinking translates into actual health gains for Mexicans.

The taxes appear likely to hurt soda makers’ sales. The American Beverage Association, a trade group for the soda makers, has fought strongly against the taxes. The group argues that the taxes would unfairly single out one industry for the obesity crisis, and says that customers will simply find their calories elsewhere.

The beverage group points to earlier studies of soft drink taxes, in the United States and in Europe. In those studies, soda consumption didn’t decline much, and obesity didn’t budge, because people switched to other caloric drinks.

“They just found that folks would just find other ways to get the products or nutrients they wanted,” said William Dermody, a spokesman for the association. “Taxes and bans and restrictions don’t change the behaviors that lead to obesity.”

But the taxes in those studies tended to be smaller than the one in Mexico, and in the United States they came in the form of sales taxes, which may have gone unnoticed by consumers.

Only one city in the United States has passed a tax like Mexico’s. Berkeley, Calif., passed a penny-per-ounce excise tax on sugary drinks last year, in effect since March. Two research teams looked at the first three months of the Berkeley tax and found that prices of soda rose, but more modestly than they did in Mexico. We don’t know if people actually bought less.

The researchers looking at Berkeley want time to gather more data on both questions. But they also think that Berkeley may be a poor test market. It’s a small city where soda is not very popular, and most people already drive several miles to buy their groceries, so stores may have been particularly wary about nearby price competition. If the Berkeley soda tax fails to change behavior, it might just be that a soda tax doesn’t work very well at the level of a small community.

David Frisvold, an assistant professor of economics at the University Iowa, who worked on one of the Berkeley studies with John Cawley, a professor of economics at Cornell, said a better policy experiment would allow researchers “to compare across states,” adding, “I think that at a broader level, it would be likely to have a different response from at the small local level.”

Source: nytimes.com
2016-01-07T15:45:41+00:00

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    Q: First off, I want to say that I am TRULY grateful for the work that you are doing. Words cannot convey my sincere gratitude. I will continue to tell my loved ones about the wonderful products, services, and information that you provide. I read your article on ADD/ADHD and was deeply saddened by the harm that is being done to our children. A very dear friend of mine has an 11 year old son that was diagnosed and is currently on medication for this so called condition. I have a 5 year old daughter who just started kindergarten. My daughter is HIGHLY sensitive and gets her feelings hurt very easily. She had two melt downs in class the first week of school. When she was 3 years old, a psychiatrist who was observing her behavior, told me that she thought she may be ADD/ADHD but I did not receive it. My question is how do we, as parents, who are still working in the matrix, educate our children. As a single mom, I do not currently possess the luxury to home-school my daughter and at the same time, I am not pleased with the public school (fool) system, or even private school that still follows the same guidelines and curriculum. Any suggestions?

    A:

    You EDUCATE your children by living TRUTH, being the example of righteous living, personal responsibility, personal accountability, integrity, morals, ethics, etc. BE ABOUT IT! Children learn by watching and then emulating! LIVE IT! The examples from home are stronger than what's learned at school and your child admires you more than any other person. Thank you kindly for your words which are greatly appreciated, Beloved. Thank you so much!