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HEALTHLINE NEWS

Soda Tax Appears to Be Working in Berkeley

Researchers say sales of sodas are down, and the sales of water are up since the California city enacted its penny-per-ounce soda tax.

soda tax

Telling people sugar is bad for them may not get them to cut down on the sweet substance.

However, making them pay more for it just might.

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That’s the overall thrust of a new study published today in the journal PLOS Medicine on a new soda tax that’s been in effect in Berkeley, Calif., for more than two years.

Researchers say sales of sugar-sweetened beverages appeared to have dropped while the sales of water have risen dramatically.

“We were pleasantly surprised to see how much things have changed,” Dr. Lynn Silver, a senior advisor at the Public Health Institute in Oakland, told Healthline.

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Read more: The skinny on soda taxes »

What researchers found

The soda tax was approved by Berkeley voters in November 2014.

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It took effect on Jan. 1, 2015.

The measure charges distributors of sugar-sweetened beverages one cent per ounce on their products.

In many stores, that extra fee is passed on to consumers.

A panel of health experts advises Berkeley city officials on what local programs should receive money from the tax.

The study authors report that as of the beginning of this year, the city had collected $2.5 million from the soda tax.

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The Public Health Institute and the Carolina Population Center at the University of North Carolina oversaw the study.

Berkeley soda tax study
  • sales of sodas in Berkeley: down 9 percent
  • sales of water in Berkeley: up 15 percent
  • sales of sodas in nearby communities: up 7 percent

Researchers studied sales of beverages in Berkeley and surrounding communities from Mar. 1, 2015 to Feb. 29, 2016.

They looked at the prices of beverages at 26 stores in Berkeley as well as the point-of-sale scanner data on more than 15 million beverage items at two supermarket chains from three Berkeley stores and six stores in adjacent cities.

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The researchers also conducted a phone survey of 957 Berkeley residents.

Researchers said their data showed sales of sugar-sweetened beverages in Berkeley dropped more than 9 percent during the year that was studied.

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They added the sale of water increased by more than 15 percent in that same time period. Sales of juices, teas, and other substitute beverages also went up.

They noted that the sale of sugar-sweetened beverages in nearby communities rose almost 7 percent.

Read more: Losing weight by skipping sodas »

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What does the study prove?

Silver said the overall impression researchers got from the study was that the soda tax is working in Berkeley.

“I think Berkeley will be seen as a turning point,” she said.

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Other experts were also encouraged by the findings, but they did throw up some caution flags.

“These are positive findings and they’re encouraging,” Dr. Bruce Lee, executive director of the Global Obesity Prevention Center at Johns Hopkins, told Healthline.

I think Berkeley will be seen as a turning point.
Dr. Lynn Silver, Public Health Institute

However, Lee noted that sales of sodas did increase in neighborhoods near Berkeley, indicating perhaps people were slipping over the city boundary to buy their sugar-sweetened beverages.

“There may be some bleeding out into the edges,” he said.

He was encouraged by the increase in water sales in Berkeley, but he was curious to see if products such as fruit juices would continue to rise.

“If the tax changes behavior, we want to know what it’s changing to,” Lee said.

Donald Marron, PhD, director of economic policy initiatives at the Urban Institute, had a similar reaction.

Marron also wondered how much of Berkeley’s soda decline was due to people driving to other towns.

If you raise the price of something, people will generally buy less of it.
Donald Marron, Urban Institute

However, he noted that tax hikes do tend to discourage consumers.

“If you raise the price of something, people will generally buy less of it,” Marron told Healthline.

Marron did say there isn’t evidence yet of direct health benefits, but that’s because the soda tax hasn’t been in place long enough.

Lee said he expects the Berkeley tax will eventually produce health benefits.

“It can have some downstream effects,” he said.

Officials at the American Beverage Association said the story in fact acknowledges that soda taxes "do not demonstrate a meaningful reduction in obesity rates."

Silver said she is hopeful the tax will have an impact on conditions such as obesity, diabetes, and heart disease brought on by sugar-laden products.

“Decreasing sugar consumption will definitely have health benefits,” she said.

Read more: America’s sugar addiction has reached epidemic levels »

Could the tax work in other places?

Is Berkeley a model for other communities?

Both Marron and Lee pointed out that Berkeley, with its population of about 115,000, is smaller than larger metropolitan areas, but larger than many suburban and rural communities.

In larger towns, they said, consumers would probably be less likely to travel across city lines to avoid a soda tax.

Silver doesn’t think people in Berkeley are doing that now.

She said researchers asked people during the phone survey if they were driving to other communities and most of them said they weren’t.

Silver also pointed out that Berkeley’s sugar consumption is about one-third of typical communities in the United States.

She believes a tax would have an even bigger impact in towns where soda sales are higher.

Officials at the American Beverage Association said Berkeley's relatively small size and higher income and low consumption rate make it "a challenging place to determine the true impact of a beverage tax."

They noted that the increase in soda sales in nearby communities indicates people are driving outside Berkeley to buy beverages. They said the same thing happened when a soda tax was imposed in Philadelphia.

The officials added that their association is taking "aggressive action" to help people reduce their sugar consumption. One way they said they are accomplishing this is by offering alternative beverages. They said they are also launching a nationwide campaign with specific emphasis in places with high obesity rates such as rural Alabama.

Silver did have some tips for other communities contemplating soda surcharges.

She said the tax should be big enough to have an impact on consumers’ wallets.

An education on the health effects of sugar should accompany the tax.

And, Silver said, the money collected from the tax should be spent wisely.

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