This week’s post comes from Dr. Allana LeBlanc. Allana is a Post Doctoral Fellow with the University of Ottawa Heart Institute and the Communications Director for the CON SNP Exec. This post was cross posted on Obesity Panacea.
When will the sugar tax come to Canada?
It’s become a question of when and not if we will start taxing sugar sweetened beverages like Coke and Pepsi. Let’s just hope Canadians are a bit quicker on jumping on the bandwagon for this than they were for the implementation of banning trans fats.
Taxes on sugar sweetened beverages (commonly known as SSBs) have gone from debate, to reality in many European countries, and many cities across the United States. In Canada, we’re dragged our heels so much that trenches have started to appear. No really. Forget implementation, we’ve only gotten so far as to hear recommendations on perhaps/maybe/sometime-in-the-near-future implementing such a tax (namely in the recent Senate report on Obesity in Canada, although there no timeline included in the report).
The main point of contention has been between “big soda” and health care providers/researchers/clinicians/community members. I’ll let you guess who has more money to put towards the cause. Let’s just remember that increase in taxation has made the single largest contribution to decrease in tobacco smoking worldwide (Gravely et al, 2017) .
As far back as 2014, the city of Berkley, California approved the implementation of a tax on SSBs. Specifically, they voted for a tax of $0.01 USD per fluid ounce on beverages with added caloric sweeteners. So if you think of your typical can of Coke, you’re looking at an increase in$0.12. The tax officially went into effect March 2015 and has now expanded to numerous other cities in the US (e.g., San Francisco, and Chicago metro center). The implementation of the tax provided researchers with a unique chance to look at consumer spending habits pre- and post-taxation. The results of this study were published yesterday in PLOS Medicine. Specifically, they compared records from 15.5 million checkouts between purchases in Berkely, and comparable cities. They also completed a telephone survey of Berkely residents spending habits and self-reported consumption of SSB.
Main outcome measures were changes in price (i.e., cents per ounce), consumer spending, and usual beverage intake in terms of kilocalories per day. Basically, did the tax do anything?
What were the main findings? (taken from the paper, sodas _ g l o b a l i z a t i o n _ Flickremphasis is mine)
- “In the 15.5 million supermarket checkouts studied, 67% of the amount of the tax was passed on to consumers across all SSBs, and the tax was fully passed through for sodas and energy drinks; in the 26-store survey, the tax was more than fully passed on in Berkeley large and small chain groceries and gas stations, especially for carbonated beverages; partially passed on in pharmacies; and not passed on in small independent gas stations and corner stores.
- Sales in ounces of taxed SSBs fell by 9.6% [p>0.001] in relation to predicted sales in the absence of the tax, while sales of untaxed beverages rose 3.5% and total beverage sales rose in Berkeley. Consumer spending per transaction (average grocery bill) did not increase, nor did store revenue fall more in Berkeley, while SSB sales rose 6.9% in comparison cities.
- Berkeley residents were low consumers of SSBs at baseline (consuming only 34% of the national average of SSBs). Dietary intake surveys [i.e. self-report measures] found shifts of −19.8% (p = 0.49) in mean daily SSB intake (grams) and −13.3% (p = 0.56) in mean calories from SSBs that were not statistically significant, while caloric intake of untaxed beverages (milk and other diary-based beverages) increased.”
As the authors noted, even before the survey, Berkely residents drank less SSBs than the national average in the U.S. and they still saw an almost 10% reduction in sales of SSB. They also saw an almost 16% rise in sales of bottled water. While I don’t necessarily agree with bottled water from an environmental perspective, this is a huge step in changing consumer taste preferences (and therefore shopping habits). Although change self-reported consumption of SSBs did not reach significance, consumers were buying less, so maybe they didn’t even realize their consumption went down?
Finally, and perhaps the most important result in seeing widespread implementation of this type of taxation, consumer spending fell LESS in Berkely than in cities that did not implement the tax. Consumers just shifted their spending habits to include more non-taxed beverages like water, milk, and fruit juice.
Win. Win. Win.
Featured image by Mike Mozart.