Soda Taxes Are a Sweetener for Public Health Efforts

In November 2014, Berkeley, Calif., passed the first significant tax on sugary drinks in the U.S. The facts are in, and it’s working.

As co-author of an evaluation recently published in PLOS Medicine, I know what the research shows. We no longer need punditry or conjecture.

The research and data show three things: First, the beverage tax in Berkeley meant people swapped unhealthy beverages for healthier ones. Our study was the largest evaluation of the nation’s first sugar-sweetened beverage (SSB) tax, covering 15.5 million checkout episodes in two chains of large supermarkets in Berkeley and comparison communities.

It found that the volume of unhealthy sugary drinks sold in Berkeley declined by 10 percent in the year following implementation. Sales of untaxed, healthier beverages rose significantly, and overall beverage sales went up in Berkeley. Sales of water rose by 16 percent while untaxed fruit, vegetable and tea drink sales increased by 4 percent. Sales of milk rose 1 percent.

Because sales for healthier beverages rose, there was no negative impact on overall beverage sales at studied local businesses. Overall consumer grocery bills did not go up. An earlier study by the University of California Berkeley found a 21 percent decline in consumption of sugary drinks among people interviewed in low-income Berkeley neighborhoods before and after the tax.

Second, the Berkeley food sector continued to grow in revenue and jobs. In a separate Public Health Institute analysis of Berkeley economic data, we found that the city’s food sector was thriving after the tax. In the first year, sales tax revenue rose by 15 percent, surpassing other sectors. Food sector jobs had increased by 469 positions in this small city — Teamsters still have to deliver water and milk.

Lastly, it raised money for local communities. The tiny city of Berkeley raised $13 per person per year to promote community health, nutrition education and diabetes prevention.

The Berkeley tax is a home run — rather than theoretical models, we now have real data showing that it did help residents make healthier choices, while raising revenue that is being used entirely for promoting health. These findings confirm that sugary drink taxes make health and economic sense at a time when obesity and diabetes epidemics are sweeping the country, and when health care spending is threatened.

Soda taxes help address a truly regressive disease — diabetes. Driven by sugary drinks and bad foods that are most intensively marketed to the poor and minorities, diabetes is striking down low-income adults all across our nation. Families are spending their savings on medications and insulin, losing toes and feet, kidneys and jobs. Teens are now getting  “adult-onset” (now known as type 2) diabetes, something I never saw as a pediatrician training in the 1980s. 

Costs of skyrocketing diabetes rates burden families, businesses, local government and health systems across the nation. In contrast, soda taxes in cities like Berkeley and Philadelphia not only benefit low-income people the most by improving health and lowering health care expenditures, but by reinvesting the resulting revenues directly in their communities.

Similar taxes were recently passed in San Francisco, Oakland and Albany in California, Philadelphia, Cook County, Ill., and Boulder, Colo., as well as the United Kingdom and Ecuador. In Philadelphia, the revenues are funding pre-kindergarten, in San Francisco and Oakland they are helping to prevent diabetes. Sugary drink taxes were even endorsed by the World Health Organization.

It’s time we stop with the opinions and pay attention to the facts. Evidence continues to accumulate showing that taxes on sugary drinks are a promising “win-win” policy.

Beverage makers can still make money selling healthier drinks — they need to stop spending millions fighting soda taxes and do just that.