Does the Sugary Drink Tax Work? New Research Suggests it Does

Bottles of soda are displayed in a cooler on June 29, 2018 in San Francisco, California. Chile passed a small tax on sugar-sweetened beverages like these in 2014. Justin Sullivan/Getty Images

Science has demonstrated time and time again that many people consume way more sugar than they should, and that consumption can have devastating health effects. Some governments have taken to taxing sugar to reduce the amount that people choose to eat and drink. It seems like a reasonable response, but does it work?

New research published in the journal PLoS Medicine has found that, at least in Chile, a small tax increase on sugar-sweetened beverages is correlated with a fewer sales.

Before 2014, Chile had a 13 percent sales tax on drinks regardless of their content. Then, a 2014 law increased sales tax for sugary drinks to 18 percent, and lowered the tax for non-sugary drinks to 10 percent. Chile defined "sugary" drinks as those with 6.25 grams or more of sugar per 100 milliliters of liquid, and non-sugary ones below that threshold.

The idea was to give consumers an incentive to choose the healthier option, especially among groups with lower incomes, who tend to drink more sugary drinks.

By using shopping data from three years before the tax and one year after the tax, researchers found that purchasing trends did change. On average, people in Chile purchased 21.6 percent less sugary drink by volume. Surprisingly, the tax more profoundly affected high socioeconomic groups, who purchased 31 percent less sugary drink. Low socioeconomic groups purchased only 12 percent less.

The researchers say that this change is small. It's hard to necessarily to necessarily equate the change in purchasing choices with the tax, or if another factor like public health education that may have inspired people to buy fewer sugary drinks.

However, even a small change—whatever inspires it—can have a big impact. "From a public health perspective, even a small reduction in sugar intake at the population level could lead to significant health gains," Cristobal Cuadrado from the school of public health at The University of Chile said in a press release. It's possible that a more significant tax would have a more significant effect as well.

While it may seem obvious that levying a tax on an unhealthy product is likely to reduce its consumption, it's important for researchers to do statistical analyses to help understand how effective these laws are. In the future, governments hoping to decide whether to levy their own tax can look to this study and others to determine if they want to try the tax themselves.