Taxing Caloric Sweetened Beverages

The link between high U.S. obesity rates and the over-consumption of added sugars, largely from sodas and fruit drinks, has prompted calls for a tax on caloric sweetened beverages (CSB). Faced with a tax, consumers may reduce consumption of these CSB and substitute non-taxed beverages, such as bottled water, juice, and milk. A tax-induced 20% price increase on CSB could cause an average reduction of 3.8 pounds of body weight over a year, for adults and an average of 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence and obesity prevalence, as well as the child at-risk-for-overweight prevalence and the overweight prevalence. Charts and tables.

The link between high U.S. obesity rates and the over consumption of added sugars, largely from sodas and fruit drinks, has prompted public calls for a tax on caloric sweetened beverages. Faced with such a tax, consumers may reduce consumption of these sweetened beverages and substitute nontaxed beverages, such as bottled water, juice, and milk. This study estimated that a tax-induced 20-percent price increase on caloric sweetened beverages could cause an average reduction of 37 calories per day, or 3.8 pounds of body weight over a year, for adults and an average of 43 calories per day, or 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to 30.4 percent), as well as the child at-risk-for-overweight prevalence (32.3 to 27.0 percent) and the overweight prevalence (16.6 to 13.7 percent). Actual impacts would depend on many factors, including how the tax is reflected in consumer prices and the competitive strategies of beverage manufacturers and food retailers.

The link between high U.S. obesity rates and the overconsumption of added sugars, largely from sodas and fruit drinks, has prompted public calls for a tax on caloric sweetened beverages. Faced with such a tax, consumers may reduce consumption of these sweetened beverages and substitute nontaxed beverages, such as bottled water, juice, and milk. This study estimated that a tax-induced 20-percent price increase on caloric sweetened beverages could cause an average reduction of 37 calories per day, or 3.8 pounds of body weight over a year, for adults and an average of 43 calories per day, or 4.5 pounds over a year, for children. Given these reductions in calorie consumption, results show an estimated decline in adult overweight prevalence (66.9 to 62.4 percent) and obesity prevalence (33.4 to 30.4 percent), as well as the child at-risk-for-overweight prevalence (32.3 to 27.0 percent) and the overweight prevalence (16.6 to 13.7 percent). Actual impacts would depend on many factors, including how the tax is reflected in consumer prices and the competitive strategies of beverage manufacturers and food retailers.

Sugar-sweetened beverage excise taxes are an effective evidence-based noncommunicable diseases (NCD) prevention policy. Along with tobacco and alcohol excise taxes, they are a tool to attain the Sustainable Development Goals, and are recommended by the World Health Organization to modify behavioral risk factors associated with obesity and NCDs, as featured in the WHO Global Action Plan. Taxes on sugar-sweetened beverages have been described as a triple win for governments, because they 1) improuve population health, 2) generate revenue, and 3) have the potential to reduce long-term associated healthcare costs and productivity losses. Taxation of sugar-sweetened beverages has been implemented in more than 73 countries worldwide. In the Region of the Americas, 21 PAHO/WHO Member States apply national-level excise taxes on sugar-sweetened beverages and seven jurisdictions apply local sugar-sweetened beverage taxes in the United States of America. While the number of countries applying national excise taxes on sugar-sweetened beverages in the Region is promising, most of these taxes could be further leveraged to improve their impact on sugar-sweetened beverages consumption and health. This publication provides economic concepts related to the economic rationale for using sugar-sweetened beverage taxes and the costs associated with obesity; key considerations on tax design including tax types, bases, and rates; an overview of potential tax revenue and earmarking; evidence on the extent to which these taxes are expected to impact prices of taxed beverages, the demand for taxed beverages, and substitution to untaxed beverages; and responses to frequent questions about the economic impacts of sugar-sweetened beverage taxation.

The obesity epidemic and excessive consumption of sugar-sweetened beverages have led to proposals of economics-based interventions to promote healthy eating in the United States. Targeted food and beverage taxes and subsidies are prominent examples of such potential intervention strategies. This paper examines the differential effects that taxing sugar-sweetened beverages by calories and by ounces have on beverage demand. To properly measure the extent of substitution and complementarity between beverage products, we developed a fully modified distance metric model of differentiated product demand that endogenizes the cross-price effects. We illustrated the proposed methodology in a linear approximate almost ideal demand system, although other flexible demand systems can also be used. In the empirical application using supermarket scanner data, the product-level demand model consists of 178 beverage products with a combined market share of over 90%. The novel demand model outperformed the conventional distance metric model in non-nested model comparison tests, and in terms of the economic significance of model predictions. In the fully modified model, a calorie-based beverage tax was estimated to cost $1.40 less in compensating variation than an ounce-based tax per 3,500 beverage calories reduced. This difference in welfare cost estimates between two tax strategies is more than three times the difference estimated by the conventional distance metric model. If applied to products purchased from all sources, a 0.04-cent per kcal tax on sugar-sweetened beverages is predicted to reduce annual per capita beverage intake by 5,800)kcal.

Sodas are astonishing products. Little more than flavored sugar-water, these drinks cost practically nothing to produce or buy, yet have turned their makers--principally Coca-Cola and PepsiCo--into a multibillion-dollar industry with global recognition, distribution, and political power. Billed as "refreshing," "tasty," "crisp," and "the real thing," sodas also happen to be so well established to contribute to poor dental hygiene, higher calorie intake, obesity, and type-2 diabetes that the first line of defense against any of these conditions is to simply stop drinking them. Habitually drinking large volumes of soda not only harms individual health, but also burdens societies with runaway healthcare costs. So how did products containing absurdly inexpensive ingredients become multibillion dollar industries and international brand icons, while also having a devastating impact on public health? In Soda Politics, the 2016 James Beard Award for Writing & Literature Winner, Dr. Marion Nestle answers this question by detailing all of the ways that the soft drink industry works overtime to make drinking soda as common and accepted as drinking water, for adults and children. Dr. Nestle, a renowned food and nutrition policy expert and public health advocate, shows how sodas are principally miracles of advertising; Coca-Cola and PepsiCo spend billions of dollars each year to promote their sale to children, minorities, and low-income populations, in developing as well as industrialized nations. And once they have stimulated that demand, they leave no stone unturned to protect profits. That includes lobbying to prevent any measures that would discourage soda sales, strategically donating money to health organizations and researchers who can make the science about sodas appear confusing, and engaging in Corporate Social Responsibility (CSR) activities to create goodwill and silence critics. Soda Politics follows the money trail wherever it leads, revealing how hard Big Soda works to sell as much of their products as possible to an increasingly obese world. But Soda Politics does more than just diagnose a problem--it encourages readers to help find solutions. From Berkeley to Mexico City and beyond, advocates are successfully countering the relentless marketing, promotion, and political protection of sugary drinks. And their actions are having an impact--for all of the hardball and softball tactics the soft drink industry employs to maintain the status quo, soda consumption has been flat or falling for years. Health advocacy campaigns are now the single greatest threat to soda companies' profits. Soda Politics provides readers with the tools they need to keep up pressure on Big Soda in order to build healthier and more sustainable food systems.

This timely reference analyzes the rationale, impact, and feasibility of taxation of sugar-sweetened beverages (SSBs) as a public health measure to contribute curbing obesity and diabetes rates, specifically in Canada. It presents the pros and cons of taxing soda, with the latest data on adverse health effects of its consumption, plus the various business and political issues surrounding the contentious proposition. Reviewed research is multidisciplinary, spanning health and medicine to ethics, economics, and law. Conclusions and caveats are clear and presented at a comfort level for the general reader. The result is a blueprint for analyzing the relevancy of taxes on sweetened soft drinks or other low-nutrition food products, plus a trove of valuable insights into aspects of government decision-making and consumer food behavior. Included in the coverage: · Reasons for specifically targeting SSBs · SSB taxation as a public health policy instrument · Effects of SSB taxation on energy intakes and population health · Potential undesirable effects relating to SSB taxation · Social and political acceptability of SSB taxation · Evaluability of SSB taxation Taxing Soda for Public Health will interest policymakers, public health professionals, advocacy groups, and researchers at the Canadian and international levels (e.g., in areas such as public health, nutrition, food and health policies, health economics, and evaluation), as well as students and all other parties interested in nutrition policies.

For fans of the New York Times bestseller I Quit Sugar or Katie Couric's controversial food industry documentary Fed Up, A Year of No Sugar is a "delightfully readable account of how [one family] survived a yearlong sugar-free diet and lived to tell the tale...A funny, intelligent, and informative memoir." —Kirkus It's dinnertime. Do you know where your sugar is coming from? Most likely everywhere. Sure, it's in ice cream and cookies, but what scared Eve O. Schaub was the secret world of sugar—hidden in bacon, crackers, salad dressing, pasta sauce, chicken broth, and baby food. With her eyes opened by the work of obesity expert Dr. Robert Lustig and others, Eve challenged her husband and two school-age daughters to join her on a quest to quit sugar for an entire year. Along the way, Eve uncovered the real costs of our sugar-heavy American diet—including diabetes, obesity, and increased incidences of health problems such as heart disease and cancer. The stories, tips, and recipes she shares throw fresh light on questionable nutritional advice we've been following for years and show that it is possible to eat at restaurants and go grocery shopping—with less and even no added sugar. Year of No Sugar is what the conversation about "kicking the sugar addiction" looks like for a real American family—a roller coaster of unexpected discoveries and challenges. "As an outspoken advocate for healthy eating, I found Schaub's book to shine a much-needed spotlight on an aspect of American culture that is making us sick, fat, and unhappy, and it does so with wit and warmth."—Suvir Sara, author of Indian Home Cooking "Delicious and compelling, her book is just about the best sugar substitute I've ever encountered."—Pulitzer Prize-winning author Ron Powers

This evidence review is designed to support policy makers seeking to implement a tax on sugar-sweetened beverages (SSB). It synthesizes the latest global evidence of effectiveness of SSB taxes and summarizes international experiences with SSB taxation to-date. SSBs are non-alcoholic beverages that contain added caloric sweeteners, such as sucrose (sugar) or high-fructose corn syrup (HFCS). The main categories of SSBs are carbonated soft drinks, energy drinks, sports drinks, less than 100 percent fruit or vegetable juices, ready-to-drink teas and coffees, sweetened waters, and milk-based drinks. SSBs are easily consumed in excess and contribute significantly to sugar and energy intakes around the world without adding any nutritional value to diets. A person consuming one SSB per day can easily exceed the WHO's guideline to limit free sugars to less than 10 percent (and ideally less than 5 percent) of total daily energy intake, and is at elevated risk of a range of adverse health effects including tooth decay, excess weight gain, and increased risk of developing obesity and type 2 diabetes. Although they are not the only component of diets linked to obesity and noncommunicable diseases (NCDs), the burden of disease attributable to SSBs is considerable given that they are a single, entirely discretionary (nonessential) component of the diet. From a public health perspective, taxation of SSBs is internationally recommended as a priority component of a comprehensive approach to preventing and controlling obesity and diet related NCDs.