Along with electing a president last week, U.S. voters weighed in on a wide range of ballot measures; among other things, four large cities – San Francisco, Oakland and Albany, Calif., and Boulder, Colo. – adopted so-called “soda taxes.” Similar levies are also in place in Chicago, Philadelphia and Berkeley, Calif., not to mention Mexico, France, Chile, Hungary and Scandinavian countries.
Specifically, the U.S. jurisdictions impose an excise tax of one cent to two cents an ounce on “non-alcoholic drinks with caloric sweeteners” – meaning soft drinks containing sugar or corn syrup, and other carbonated and non-carbonated “sports” and “energy” drinks that contain caloric sweeteners.
As momentum builds for soda taxes, the question is: Will taxes reduce consumption and, if so, will it make a difference to people’s health?
The theory – and the early evidence – is a cautionary yes.
Mexico has become the poster child for this cause. It imposed one-peso-per-litre (about 10 per cent) tax on sugary drinks in 2014 and saw consumption fall by 6 per cent.
A recent study estimated that, over a decade, the tax (and related intake of sugar) could save 18,900 lives, 189,300 cases of diabetes, 20,400 strokes and heart attacks and reduce health costs by $983-million (U.S.). The tax has also raised more than $2-billion for the Mexican treasury.
But, little noted is that after the initial drop, sales of sugary drinks in Mexico have begun to creep back up, a reminder that consumer behaviour is complicated. In Mexico, a bottle of pop (six pesos) is cheaper than a bottle of water (eight pesos).
In fact, one of the big unknowns with a soda tax is, if it turns people away from sugary drinks, what do they replace them with?
Some consumers simply turn away from brand names such as Coke and Pepsi and choose cheaper generic cola. Others opt for fruit juices or chocolate milk, which, while they have a veneer of healthiness, are no better than pop (and, calorically, sometimes worse).
Then there are “diet” drinks, which, while they have no calories, can spur the desire for sweets and lead people to make some interesting trade-offs, such as: “This Diet Pepsi has no calories, so I can allow myself a bag of chips with it.” Furthermore, we know that the consumption of sugar-sweetened beverages has been declining steadily for a number of years because consumer tastes are changing.
The “beverage industry” makes many spurious claims, but they are right to wonder why we would tax sugary drinks and not sugary foods. The “you have to start somewhere” argument has some merit, but it’s true, too, that “Big Soda” makes for an easy, lazy target. A tax on sugary drinks, especially not a token penny-an-ounce tax, is not a magic bullet that will resolve the obesity epidemic. If you want a tax to have an impact on choices, it has to be significant – in the 20-per-cent range. Small, penny-at-a-time taxes will do little more than raise revenue. (Though, in Canada, a penny an ounce would translate into $1.5-billion a year.)
To benefit population health, a soda tax needs to be coupled with public-health campaigns that, for example, urge people to drink tap water. (Because bottled water, while containing no calories, has environmental impacts that are ultimately unhealthy.) But, above all, there needs to be a cultural change, as we saw with tobacco. While high taxes spurred a reduction in tobacco use, equally important was the “denormalization” of smoking, leading people to wonder “why?” before lighting up, and rules and regulations that made it more difficult to do so. Similarly, we need to create a food environment in which people think twice before reaching for a can of pop before a glass of water, or Gatorade before an apple.
It’s not enough to crack down on sugary drinks (and foods). We need to make healthy alternatives such as fruits and vegetables more affordable. We have to stop subsidizing agribusiness to produce corn for corn syrup and use the money to bring down the price of fresh foods. Currently, we have a situation in which 10 per cent to 15 per cent of all calories consumed by children come from sugary drinks – from liquid candy. But getting them to eat healthy requires more than putting the pop out of reach. A tax on sugary drinks is justified but not sufficient; it’s do-able, but has to be done right.