Sugar Tax Proves Successful in the US

Sugar Tax Proves Successful in the US

The topic of a sugar tax has been the subject of continuous and lengthy debate both in Finland and internationally. A recent study is suggesting that the implementation of such a tax has been successful in achieving its goals, at least in relation to the consumption of soft drinks in the United States.

The research report, published in the Jama Health Forum scientific journal, indicates that in five major American cities, sales of sugar-laden beverages have significantly decreased as a direct result of the sugar tax. Furthermore, this change appears to be enduring, rather than a temporary response to the new tax.

The researchers involved in the study interpret these findings as further validation of the effectiveness of health-based taxes. They posit that expanding the application of the tax could yield additional benefits on a larger scale.

In Finland, the government has made the decision to incrementally increase the tax levied on sugar-sweetened beverages. Once approved by the European Commission, the tax will range from 16 to 48 cents per liter, with the exact amount being determined by the quantity of added sugar in the drink.

The American cities studied, namely Philadelphia, Seattle, San Francisco, Oakland, and Boulder, have a similar tax structure in place. Depending on the amount of sugar in the beverage, the tax can vary from 34 to 65 cents per liter.

As a result of the implementation of this tax, prices of sugar-sweetened beverages increased by around 33% in these cities. Correspondingly, sales of these drinks decreased by the same percentage.

Similarly, in Finland, the increase in the tax on sugary drinks led to a noticeable reduction in their consumption.

A question that arises is whether consumers simply shifted their purchasing habits to other, cheaper locations?

An earlier study suggested that while the sugar tax did significantly decrease sales within the city of Philadelphia, sales in the surrounding areas saw a correlating increase.

This led to the conclusion that consumers were simply shopping elsewhere to avoid the additional tax.

However, in a more recent study conducted by economics professor Scott Kaplan and his research team, there were no indications that consumers were making these kinds of shopping trips to tax-free zones.

In Finland as well, the 2014 increase in the tax on sugar-laden drinks resulted in a clear decrease in their consumption.

Research conducted by the Research Institute for Wage Earners suggested that the availability of cheaper, sugar-free alternatives played a significant role in this decrease.

Interestingly, a similar tax on candy did not result in a decrease in candy sales.

Leading the recent study, Kaplan told US NPR news service that a quarter of the added sugar in the diets of American adults comes from sugary sodas.

The negative health impacts associated with excessive sugar consumption are well documented, including its links to obesity, diabetes, heart disease and tooth decay. The primary goal of the sugar tax is to reduce these health risks by reducing sugar consumption.

When a handful of major US cities first introduced the tax on sugary sodas a decade ago, the soft drink industry spent millions of dollars in an attempt to oppose the tax.

The Soft Drink Industry Association of the United States has since told NPR that it is now actively working to provide consumers with low-sugar options.

According to the association, this strategy has been successful. Almost 60 percent of drinks sold in the United States are sugar-free, and the caloric intake from soft drinks is lower than it has been in decades.

Despite these changes, the association continues to assert in its statements that the tax is still ineffective and ultimately detrimental to consumers.