Summary:
Based on current research, there is evidence from several studies that higher tax on drinks with high sugar content might reduce sugar consumption. However, researchers feel that the levied sugar taxes might only reduce the average sugar consumption globally by a small amount.
But Jack Winkler, emeritus professor of nutrition policy at London Metropolitan University, argues that such taxes would be a positive development in principle, but are politically unpalatable and would have to be enormous to have any effect. “Nutrition policy needs price instruments, but a more positive selection. Sugar
taxes are unlikely to be adopted and would not make much difference anyway,” he concludes. Source: BMJ
The amount of sweetened soda consumed also plays a role in obesity development.
Correlation, Not Causation- Advocacy of a soda tax starts with a “link” between rising consumption of caloric-sweetened beverages and overweight and obesity. But the advocates of this approach gloss over the nature, tightness or relevance of that linkage to its taxing strategy. As to the nature of the linkage, unlike smoking, which is hazardous to one’s health under any circumstances, caloric-sweetened beverages are not intrinsically hazardous or even problematic. “Taken as directed,” they can be pleasurable, a quick source of energy, a nice meal complement or a break from the tedium of the day. It is when sweetened soda is consumed excessively that it begins to contribute to overweight and obesity. As with so many of life’s choices, it is the dosage that matters. Source: Caloric Sweetened Beverage Taxes: The Good Food/Bad Food Trap
Evidence:
In favor of sugar taxes
The risk of disorders such as obesity, diabetes, and heart disease is increased by the consumption of sugary drinks as discussed here.
Research shows that sugar availability appears to be uniquely correlated to diabetes prevalence.
Our results show that sugar availability is a significant statistical determinant of diabetes prevalence rates worldwide. By statistically studying variation in diabetes rates, food availability data and associated socioeconomic and demographic variables across countries and time, we identified that sugar availability appears to be uniquely correlated to diabetes prevalence independent of overweight and obesity prevalence rates, unlike other food types and total consumption, and independent of other changes in economic and social change such as urbanization, aging, changes to household income, sedentary lifestyles and tobacco or alcohol use. Source: The Relationship of Sugar to Population-Level Diabetes Prevalence: An Econometric Analysis of Repeated Cross-Sectional Data
- Research from Mexico also shows that price decrease of sugary foods increases abdominal obesity and type II diabetes.
Reduced form results show that a decrease in prices of sugary foods increases abdominal obesity, type two diabetes and hypertension significantly, yet changes in prices of foods rich in other nutrients have no significant effect on health. While previous literature on this topic has mostly focused on contemporaneous or
one year lagged effects of price changes on health, this empirical analysis shows that the effect of price change in foods rich in sugar is strongest within the first year and diminishes over a period of four years. Source: Bittersweet: How Prices of Sugar-Rich Foods Contribute to the Diet-Related Disease Epidemic in Mexico
- Research shows that taxes on sugar sweetened beverages might reduce obesity.
An increase in price of SSBs is associated with a decrease in consumption; and the higher the price increase, the greater the reduction in consumption. Also, as the price of SSBs rises, the consumption of fruit juices and whole milk tends to increase and the consumption of diet drinks decreases. The alternative beverages are most likely better for health than SSBs. The few available studies suggest that higher prices of SSBs may lead to modest reductions in weight in the population. This evidence and the link between obesity and SSBs and its health outcomes should be sufficient for policy makers to consider SSB taxation as part of a package of intervention designed to reduce the health and economic burden due to obesity. Source: Evidence that a tax on sugar sweetened beverages reduces the obesity rate: a meta-analysis
This study estimated that a tax-induced 20-percent price increase on caloric sweetened beverages could cause an average reduction of 37 calories per day, or 3.8 pounds of body weight over a year, for adults and an average of 43 calories per day, or 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to 30.4 percent), as well as the child at-risk-for-overweight prevalence (32.3 to 27.0 percent) and the overweight prevalence (16.6 to 13.7 percent). Source: United States Department of Agriculture
Evidence on the effectiveness of taxes to reduce consumption has been shown,
particularly for SSBs. Arguably, the impact is small, but SSBs are relatively cheap
products and the tax rates have been relatively small. So far, taxes on foods high in sugar, fat and salt content have resulted in price increases, but change in demand for these foods has been more variable, reflecting perhaps a more complex market. The impact on consumption has so far only been analysed at a population level. It is possible that effects have been greater across different sub-populations such as high and low demand consumers. Source: Health-related taxes on foods and beverages
A UK data survey estimated that 20% tax might lead to a reduction in the obesity rates prevailing in the United Kingdom. The research is further explained here.
A 20% tax on sugar sweetened drinks would lead to a reduction in the prevalence of obesity in the UK of 1.3% (around 180 000 people). The greatest effects may occur in young people, with no significant differences between income groups. Both effects warrant further exploration. Taxation of sugar sweetened drinks is a promising population measure to target population obesity, particularly among younger adults. Source: Overall and income specific effect on prevalence of overweight and obesity of 20% sugar sweetened drink tax in UK: econometric and comparative risk assessment modelling study
- Scientific policy advisers for governments feel that sugar taxes would eventually reduce consumption of such products.
Sirpa Sarlio-Lähteenkorva, adviser at the Ministry of Social Affairs and Health in Finland, says that a specific tax on sugar would reduce consumption. "Increasing evidence suggests that taxes on soft drinks, sugar, and snacks can change diets and improve health, especially in lower socioeconomic groups," she writes. Taxes on specific food categories that are common constituents of poor diets "are practicable because they are simple to administer," she adds. However, she acknowledges that taxes can only be a partial solution, and suggests that a sugar tax on all products may be more acceptable "because it would treat all sources equally. It could also stimulate reformulated products, with less sugar and hence liable for less tax." "We need fiscal policies that take health seriously," she writes. "Governments must tackle the related adverse health effects, such as diabetes, coronary heart disease, and hypertension. A tax on sugar, preferably with measures that target also saturated fat and salt, and incentives for healthy eating, would help," she concludes. Source: Eurekaalert.org
Against the high impact of sugar taxes
However, there is a need for bigger studies to test this hypothesis since the current evidence shows that the soda tax rates do not benefit all people equally in terms of their health status.
Some evidence produced in our research and previous research suggests that
soda taxes may have differential impacts on people depending on their current health
status. Individuals with a normal BMI (between 18.5 and 25) may reap the most benefits from the soda tax in terms of lowering their future consumption. However, the impact on individuals that are already overweight and obese is less convincing. These results suggest that soda taxes may be an important tool for preventing future obesity problems, but will not help to solve the existing epidemic. Source: The Effect of State Level Soda Tax on Adult Obesity
- Research shows that raising soft drink taxes does not completely eliminate obesity or significantly impact it. A detailed explanation by the researchers of this finding can be found here.
Our results suggest that raising the soft drink tax to 58 percent would decrease the mean BMI in the US by 0.16 points. In comparison, the average gain in BMI between 1990 and 2006 was more than 2.3 points. A similar calculation suggests that increasing the tax rate by 55 percentage points would decrease the proportion of the population who are obese or overweight by nearly 0.7 percentage points While increasing the tax rate on soft drinks to be comparable with cigarettes will not halt the obesity epidemic, the impact on population weight would likely be non-negligible. Source: Can Soft Drink Taxes Reduce Population Weight?
- Only a minimal amount of global sugar intake is impacted by sugar taxes.
He points out that referendums in the United States have led to soft drinks taxes in just one city (Berkeley), while only four of 53 states in WHO-Europe have adopted food taxes, all with the stated aim of raising revenue, not improving health.
Food taxes are also economically ineffective, he adds. Two rigorous UK studies found that a 10% tax would reduce average personal daily intake by 7.5 mL (less than a sip), while a 20% tax would reduce consumption by 4 kcal. “Effects of this size will not reverse global obesity,” he argues. Source: BMJ
- Soda taxes also might influence people to switch to the so called better "diet drinks" which causes further negative impacts.
Despite limited evidence that customers would consider switching to artificially-sweetened beverages after taxation, these beverages are often recommended alternatives for sugary soda. Thus, understanding the potential health
effects of this potential substitution is critical. Despite some disagreement by beverage industry-supported persons (Allison and Mattes, 2009), the weight of evidence demonstrates clearly that sugary soda has an negative impact on
health (Dhingra, R. et al., 2007; Palmer, J.R. et al., 2008; Schulze, M.B. et al., 2004). Systematic reviews of studies have found that sugary soda consumption is associated with higher energy intake and weight gain among both adults
and children and an increased risk of diabetes among adults (Malik, Schulze, and Hu, 2006; Vartanian, Schwartz, and Brownell, 2007; Vermunt, Pasman, and Kardinaal, 2003). Intriguing experimental data from DiMeglio and Mattes (2000) found that sugary beverages may be more harmful than solid sugar. Source: CAN TAXING SUGARY SODA INFLUENCE CONSUMPTION AND AVOID UNANTICIPATED CONSEQUENCES?
Much more research estimating the effects of high to very high soft drink taxes is needed.
The mean published estimate is that a 1 percent increase in soda price would reduce the quantity of soda demanded by 0.79 percent. The modest soft drink taxes that currently exist appear to have negligible effect on body weight. A challenge for estimating the impact on obesity of a substantial soft drink tax is that no such taxes currently exist. Source: The Economics Of Childhood Obesity
- Health benefits for the sugar taxes is not yet demonstrated.
To date, no country has seen non-trivial health benefits from taxing food or soft drinks at any level. The results are uniformly negative. Theoretically, very high taxes could have some effect, but this is unknown and the unintended consequences of very high tax rates would be severe in terms of making the poor poorer, fuelling the black market, driving inflation, and creating discontent amongst voters. Source: The Ineffectiveness of Food and Soft Drink Taxes
TL;DR: As of 2014, research shows that the taxes tend to show a effect on consumption.
Taxing soda could serve an important role in generating revenue as well as impacting health. However, the explicit effects on health are unclear because of uncertainty about the patterns of beverage substitution. More research, especially experimental evidence, is needed to explore the level and type of tax that would be required to decrease consumption and how substitutions may impact overall calorie consumption and weight. However, transition to artificially-sweetened beverages due to a sugary soda tax would likely be associated with reduced weight and risk of
diabetes. We still don’t know if other negative health consequences might be associated with this transition, especially for children, and potential harms should be part of the consideration of unintended consequences of a soda tax. Despite no evidence to support likely substitutions of water for soda, perhaps any soda tax should be accompanied by an educational campaign to encourage people to choose water as the best alternative to soda. Source: CAN TAXING SUGARY SODA INFLUENCE CONSUMPTION AND AVOID UNANTICIPATED CONSEQUENCES?
As there are many factors that drive SSB consumption, modifying the consumer environment through taxation could produce a more lasting effect on behavioral change and levels of obesity, as price has been found to be the key determinant of consumption. Source: CPH
However, its overall effects on health is still unclear/unknown.
The impact of existing taxes on health has not yet been established but it is likely to be small because the impact on consumption has been small. The potential of these taxes to collect revenue for the government has also been shown. One effect that has not been measured for any of the existing taxes is their ability to convey a health message that in the long-run contributes to a reduction in the consumption of taxed products. Source: Health-related taxes on foods and beverages
