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In cities with sugary drink taxes, prices went up and purchases dropped

MARY LOUISE KELLY, HOST:

Cities that imposed taxes on sugary drinks saw prices rise and consumption fall. That is according to a study published today in the journal Jama Health Forum. Researchers say this provides more evidence that these controversial taxes really do work. Joining me to talk it through, NPR's Maria Godoy. Hey there.

MARIA GODOY, BYLINE: Hi.

KELLY: So which cities have done this? What are we talking here?

GODOY: Well, we're talking about five U.S. cities that introduced the taxes between 2017 and 2018 - so Oakland and San Francisco in California, Seattle, Boulder, Colo., and Philadelphia. The taxes ranged from 1 to 2 cents per ounce. So for a two-liter bottle, that would be about 67 cents to $1.30 extra in taxes. These studies have looked at the effect of soda taxes before, but they usually studied one city at a time. This new study looked at multiple cities at the same time to get an idea of what might happen if these taxes were more widespread.

KELLY: And what did happen? What did the researchers find?

GODOY: Well, you know, prices went up by about 33%, and purchases went down by about the same amount, 33%. Scott Kaplan is an economics professor at the U.S. Naval Academy. He led the study. And he says that's actually a big effect.

SCOTT KAPLAN: In other words, for every 1% increase in price, we find that purchases fall by about 1%.

GODOY: So when people had to pay more for sugary drinks, they reduced their consumption.

KELLY: Maria, my mind, of course, is shooting straight to ways that people could game this. Couldn't people have just - I don't know - driven to the next city over, driven to the suburbs, found soda that was still cheaper?

GODOY: Yeah. You know, that's a good point. And earlier research in Philadelphia found that while sales of sugary drinks went down in that city, they actually went up in surrounding areas, indicating that people, yeah, were driving to avoid the taxes. But this new study didn't find that. Across the five U.S. cities they looked at, those cross-border sales didn't increase.

KELLY: So it worked is what you're telling me. I mean, that's the stated goal of these taxes - is curbing consumption.

GODOY: Well, you know, from a public health standpoint, sugary drinks really have no nutritional value. And as Kaplan noted, you tend to guzzle them without registering the calories, so they don't fill you up.

KAPLAN: Sugary beverages make up, like, a quarter of all the added sugar we see in the average adult American diet, and that's a really big amount.

GODOY: And, of course, too much sugar is linked to a host of bad health outcomes like diabetes, obesity, heart disease. So these taxes are designed to discourage people from drinking so much sugar. In fact, back in 2019, both the American Heart Association and the American Academy of Pediatrics officially endorsed soda taxes as a good way to reduce the risk of childhood obesity. And just last month the World Health Organization called on countries to increase taxes on sugary drinks.

KELLY: Although, as we noted right at the start, these are really controversial. There's all kinds of pushback to these taxes.

GODOY: Well, right. The U.S. saw a flurry of localities pass these sugary drinks starting about a decade ago. And then there was pushback. And the soda industry poured millions of dollars into fighting them. In some states, opponents passed laws that basically stripped localities of the power to be able to pass soda taxes, so they kind of stalled. In a statement to NPR, the American Beverage Association said that the industry's strategy of offering more choices with less sugar is working and that nearly 60% of beverages sold today have zero sugar. They say these drink taxes are unproductive and hurt consumers.

KELLY: Thank you, Maria.

GODOY: My pleasure.

KELLY: NPR's Maria Godoy. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Maria Godoy
Maria Godoy is a senior science and health editor and correspondent with NPR News. Her reporting can be heard across NPR's news shows and podcasts. She is also one of the hosts of NPR's Life Kit.