Philadelphia Soda Tax Cuts Consumption of Sugary Drink by 40%

Updated | Philadelphians are now 40 percent less likely to drink soda every day-  after a tax was placed on sweetened drinks in the city, a new study has shown. 

The city started taxing sweetened drinks at 1.5 percent per ounce from in January 2017. The money raised was used to pay for community projects, including prekindergarten programs.

Now, a study of almost 900 residents surveyed a month before and two months after the tax was enforced has shown that Philadelphians were 40 percent less likely to drink sugary drinks, compared with residents of nearby cities including Trenton, Camden and Wilminton.

The likelihood of residents consuming energy drinks every day plummeted by 60 per cent, but they were 58 percent more likely to drink bottled water every day.

GettyImages-151960676 A 32-ounce soda is filled on September 13, 2012 in New York City. The soda tax in Philadelphia has reduced how often residents consume sugary drinks. Mario Tama/Getty Images

The tax did not, however, cut into the consumption of non-carbonated sweetened and fruit-flavoured drinks.

Yichen Zhong, a doctoral student at the Dornsife School of Public Health and the lead author of the study, said in a statement: "If distributors fully pass the tax on to customers, it could increase the price of soda and energy drinks by about 20 percent.

"It is expected that a price increase of that magnitude will influence some consumers to stop purchasing non-essential items like sugary soda and possibly switch to a lower-priced beverage, like bottled water - and our results are in line with that."

Commenting on the stable fruit-drink sales, Dr. Amy Auchincloss, an associate professor in the Dornsife School of Public Health and a co-author of the paper, said the team was not sure whether this was because retailers did not raise prices or because consumers chose to pay more for those beverages.

“Those drinks may be viewed as healthier than soda despite having the same amount of added sugar, about 10 packets of sugar per 12 ounces," Auchincloss said.

The results come as the U.S. attempts to tackle its obesity epidemic. More than one third of U.S. adults are obese, according to the Center for Disease Control. Diseases related to the condition, including heart disease, strokes, type 2 diabetes and certain types of cancer, are among the leading causes of preventable deaths.

Auchincloss stressed that there is ample evidence to show the extra calories in sugary drinks contribute to weight gain.

"Frequent consumption of sugary beverages has also been linked to higher risk of type-2 diabetes, heart disease and tooth decay. Considering that 30 percent of Philadelphians have at least one sugary beverage each day, any kind of cut in consumption could be impactful,” she said.

Aisling Pigott, a qualified dietitian and spokesperson for the British Dietetic Assocation told Newsweek: "This study shows promising results and increased awareness of sugar and sugary drink consumption. Any improvements or awareness of positive lifestyle changes should be commended and encouraged. 

"The health impacts of high sugar, high-energy foods requires ongoing attention and public health awareness. While there may be promising results, it's worth noting that the study participant numbers are relatively small, and the research doesn't demonstrate the long term health impacts or lifestyle changes associated with the tax.

The study's authors acknowledged they must now continue to monitor sugary drink consumption in order to understand whether the trend will continue. 

A separate study published in the journal Health Affairs into a similar tax placed on drinks in Mexico showed that purchases fell by 5.5 percent in the first year after the tax was implemented, and by almost 10 percent the following year.  

Dr John D’Attoma, an expert in tax behavior at the University of Exeter business school, said the Philadelphia study was strong and supported of research that demonstrates taxes can be used to influence people's behavior. 

"At the more macro-level, it’s a great example of how institutions can shape behavior, and over-time, social norms. A great example of this is cigarette taxes," he told Newsweek.

"However, although this might seem like good policy to some, there are those who would argue that good tax policy should be neutral. By that, I mean, tax policy should have no distorting effects on individual choices. As such, the goal is to raise this revenue without distorting the decisions that individuals would otherwise make for purely economic reasons.

He added: "Taxing sugary drinks clearly defies principles of tax neutrality. In this case, nudges (limiting sugary drinks to a certain size) might be a better instrument than taxes for discouraging behaviour with negative societal impacts. Nudges, however, can’t increase revenue to fund programs that encourage positive behaviour."

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