A study on the impact of a tax on fizzy drinks and other products with a high sugar content showed that there was little modification of consumer purchasing and consumption habits.
A sugar-sweetened beverage (SSB) tax was introduced in the Spanish region of Catalonia in May 2017.
“In response to rising levels of obesity and the serious and significant negative effects this is having for individuals, their families and wider healthcare systems, over the past five years there has been growing interest in the potential effectiveness of sugar taxes,” said lead researcher Dr Eleonora Fichera at the Department of Economics, University of Bath.
To find out how the sugar tax affected purchasing habits, the researchers used customer store card data from a chain of Spanish supermarkets.
The SSB tax resulted in an increase in the price of a one litre bottle of Fanta, Sprite or Seven Up! from €1.02 to €1.18. The tax also spurred reformulation, whereby drinks producers have created and marketed new products with greatly reduced overall sugar content (such as Coke Zero).
The overall impact was tiny, however – a mere 2.2% reduction in average calories per consumer.
“By analysing the effect of a tiered tax system for sugar-sweetened beverages in Catalonia and by comparing its impact with the rest of Spain (where a tax was not introduced) our results provide important evidence to policymakers keen to explore the potential effectiveness of this approach.
“And whilst our results demonstrate some impact in shifting behaviors towards products lower in sugar, this effect is modest at best. If these taxes are to be more effective, they need to be more visible at the checkout so that consumers become increasingly aware of the added cost of their high-sugar choices. This requires that the tax is more specific too, ensuring producers are forced to pass the tax through to consumers. Although more than 20% of the Catalan tax was passed through to consumers, not all of it was, making the tax less impactful,” concluded Dr Fichera.
Source: News-Medical.Net
Journal information: Fichera, E., et al. (2021) How do consumers respond to “sin taxes”? New evidence from a tax on sugary drinks. Social Science & Medicine. doi.org/10.1016/j.socscimed.2021.113799.
