Philadelphia: a spectacular effect for the "tax soda"?

"Victory" for the soda tax in Philadelphia. According to a study, it would be very effective in the city of the east coast and caused a real decline in sales Concretely, my sales of sweetened and sweetened drinks have dropped 38% in Philadelphia since a special tax was imposed in January 2017. Sufficient for the authors to defend the spread of these taxes to fight against obesity, especially in modest circles. Seven US cities, France, Mexico and other jurisdictions have imposed taxes in recent years to discourage the consumption of beverages whose sugar content is linked to public health problems such as obesity and diabetes, particularly in children and teenagers.

The tax is higher or lower depending on the place. In Philadelphia, a city of 1.6 million people on the east coast of the United States, it is about 50 cents per liter (1.5 cents per liquid ounce). Supermarkets, supermarkets and small businesses have more or less passed on the tax, and on the shelves, the prices of bottles and cans increased on average from 24 to 53 cents per unit, depending on the type of store. Sales in Philadelphia fell by half in volume in 2017 compared to 2016, shows the analysis, based on crate data in stores accounting for a quarter of the city's beverage sales, and published Tuesday in the Journal de l American Academy of Medicine (Jama)

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Displaced purchases

Consumers partially offset by going to border stores, where sales increased. Taking these purchases into account, the net decrease in sales is estimated at 38%. To make sure that the drop is indeed due to the tax, the researchers compared Philadelphia to Baltimore, without tax: there, sales remained stable.

The numbers confirm one of the bases of economic theory: if the price of a product increases, people buy less. Economists "can be reassured about their theory," laughs Christina Roberto, professor of health policy at the University of Pennsylvania. "Taxing sweetened beverages is one of the most effective strategies to reduce consumption, and I think this public health policy is obvious," she told Agence France-Presse.

Industry defends itself

The ultimate goal is of course to reduce obesity, cavities, diabetes cases … What the authors did not measure; this remains to be done. But they believe that reducing the intake of added sugars is a step in the right direction. In the United States, children consume 17% of their calories from added sugars instead of the recommended 10%, and half of those sugars come from drinks. Children from poor families, as well as black children and adolescents, are much more consumers of fruity and sweet drinks than the richest and whites in the United States.

"The current evidence is already sufficient to encourage the adoption of these taxes, while monitoring the consequences," wrote doctors and public health experts in an editorial published by Jama. The American Beverage Association responded by denouncing taxes that "hurt working people, small businesses and their employees". According to spokesman William Dermody, the industry has created less or not sweet drinks, and smaller formats.

Variable tax in France

In Philadelphia, it is especially in supermarkets that the decline has concentrated, among large bottles "family" and packs. Perhaps this is partly because tax information placards have made it more "visible" to the client. No substitution effect with water was observed.

The Philadelphia tax proved more dissuasive than in the small town of Berkeley, where it is lower (1 cent per liquid ounce). The highest taxes are in Boulder (2 cents) and Seattle (1.75 cents). France adopted a soda tax in 2013, but its results were mixed.

It has been modified and since last summer, it varies according to the sugar rate, while remaining generally lower than the US rates. It is in the order of 15 cents (17 cents) per liter of Coca Cola, for example. Other brands have preferred to lower the sugar content.

Read also Sugar, how to avoid the excesses

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