‘Soda Tax’ Impact: Philadelphia Residents 40 Percent Less Likely To Drink Sugary Soda Each Day After New Tax

Bottles of Pepsi soda displayed on a shelf at a market in San Rafael, California.
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Philadelphia residents were less likely to drink sugary soda each day after the launch of a beverage tax of $0.015/ounce on sugar and sugar-substitute beverages last year, a new study from Drexel University researchers has revealed.

The new tax on nonalcoholic sweetened beverages was levied on distributors and came into effect on January 1, 2017. It was considered one of the steepest in the U.S. and was estimated to raise the price of diet soda, energy drinks, and sugary fruit juice beverages by 20 percent.

In the new study, whose findings were published in the American Journal of Preventive Medicine, the researchers analyzed the impact of Philadelphia’s beverage tax on residents’ consumption of energy drinks, fruit drinks, soda, and bottled water in the first 60 days of the implementation of the new tax. About 900 Philadelphia residents (men and women) were contacted by researchers and were asked questions about changes in their beverage consumption habits before and after the new tax.

Researchers asked similar questions to 900 other residents of three nearby cities, namely, Trenton Camden, and Wilmington. The results revealed that after the launch of the tax, Philadelphians were 60 percent less likely to drink energy drinks and 40 percent less likely to drink sugary soda every day.

Instead, they were 58 percent more likely to drink bottled water each day. The study also revealed that there was no decline in the consumption of sugar-added fruit drinks like cranberry juice or lemonade after the tax.

“If distributors fully pass the tax on to customers, it could increase the price of soda and energy drinks by about 20 percent,” said Yichen Zhong, a doctoral student at the Drexel University’s Dornsife School of Public Health.

“It is expected that a price increase of that magnitude will influence some consumers to stop purchasing non-essential items like sugary soda and possibly switch to a lower-priced beverage, like bottled water — and our results are in line with that.”

According to researchers, investigating the daily intake of sugar-added drinks is significant as it might help public health professionals and policymakers to determine unhealthy sugar intake levels in residents of a particular city/region.

Amy Auchincloss, an associate professor at Drexel’s Dornsife School of Public Health, explains that extra calories consumed through sugary beverages are generally linked to weight gain and a higher risk of heart disease, type-2 diabetes, and tooth decay, and any reduction in the intake of such beverages could be impactful.

However, researchers warn that it will be too early to claim that the beverage taxes have a long-lasting impact on community health.

In Philadelphia, the authorities implemented the beverage tax to generate more funds to expand the pre-kindergarten (pre-K) schooling for children. According to Philly, such centers in the city started experiencing rapid growth soon after the tax went into effect in January 2017. The authorities had anticipated the new tax to generate $46 million revenue in 2017, of which $13 million was to be spent on pre-K in the same year.

According to experts, the new tax – in addition to its primary goal of expanding educational programs for children in Philadelphia – definitely has some apparent implications for community health.