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Soda Sales Go Slightly Flat After Added Tax

— But no impact on overall beverage, store revenue in California town

MedpageToday

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NEW ORLEANS -- While sales of sugar-sweetened beverages were down in the 6 months following taxes on these drinks in Berkeley, Calif., overall beverage sales and store revenue changes were negligible, a preliminary analysis of sales data presented here found.

Following the , sales of sugar-sweetened beverages in Berkeley grocery stores declined, while sales of these beverages outside Berkeley increased (-8.5% versus +6.6%, P<0.001), reported , of the University of North Carolina in Chapel Hill, and colleagues, at a presentation at Obesity Week, a joint meeting of The Obesity Society and the American Society for Metabolic and Bariatric Surgery.

Action Points

  • Note that this study was published as an abstract and presented at a conference. These data and conclusions should be considered to be preliminary until published in a peer-reviewed journal.

But overall beverage sales remained mostly flat in Berkeley stores (+0.1%), with only a 1.3% increase in beverage sales in non-Berkeley stores. Similarly, reduction in revenue was nearly nonexistent -- with a -$0.19 per transaction reduction difference between Berkeley stores and non-Berkeley stores (-$0.48 versus -$0.29 per transaction, respectively).

The amount of tax also seemed to vary by store and by type of beverage. Some stores passed the tax on to consumers, and some simply absorbed the cost of the tax themselves. The authors wrote that the tax "pass-through" was complete in large and small chain supermarkets and chain gas stations -- reporting a 70% pass-through in the 6 months following the tax.

But not all sugar-sweetened beverages were impacted equally. Unweighted point-of-sale data revealed that pass-through for sodas and energy drinks was a little over $0.01 per oz, while other taxed drinks that included fruit drinks, sport drinks, flavored waters, as well as some teas, had pass-through of $0.05 per oz.

"Customers did purchase less of the taxed beverages in Berkeley stores, even though tax pass-through was incomplete," Ng said.

This preliminary data was compiled from point-of-sale data in three Berkeley stores, which were part of two large grocery store chains, and six comparison stores outside of Berkeley, starting from when the tax was implemented in March 2015.

, of University of Rochester Medical Center in New York cautioned that while sugar-sweetened beverages are one of the many culprits to look at in terms of obesity, it would be a false assumption that just by taxing the product, obesity rates will go down.

"One of the things I worry about with soda taxes is how much this will truly impact obesity prevalence,"said Cook, who was not involved in the research. "These results are really encouraging, but it's not going to prevent obesity. It's a useful piece of the plan, but we can't oversell it."

Ng stressed that the study results "do not imply causality in any way."

She added that her group had collected updated data for 12 months after the implementation of the tax, but it was currently in the process of being published. This data would also include analysis on changes in self-reported sugar-sweetened beverage consumption among adults in Berkeley.

Cook brought up how the revenue from these taxes might be used to aid in obesity prevention. He noted that some cities with a "soda tax," , hope to reinvest some of the tax proceeds back into obesity-related intervention.

"It's at least an idea that we've taxed this product and generated revenue, so let's pay for evidence-based intervention that would otherwise be a tax burden to the community," he said.

Disclosures

The study was funded by Bloomberg Philanthropies.

Primary Source

Obesity Week

Tallie LS, et al "Evaluation of the Berkeley sugar sweetened beverage tax: Did it affect prices, sales, revenue or consumption?" Obesity Week 2016; Abstract T-OR-2017.