Study says Berkeley soda sales down 9.6% due to tax
April 20, 2017
by Ron Sterk
Sweetened soda sales in Berkeley, Calif., dropped 9.6% one year after a 1c-per-oz tax was implemented.
KANSAS CITY — Sweetened soda sales in Berkeley, Calif., dropped 9.6% one year after a 1c-per-oz tax was implemented, while sales increased 6% in other Bay area stores without a tax, according to a study conducted by the Public Health Institute and the University of North Carolina published April 18 in PLOS Medicine.
Sales of diet soft drinks and diet energy drinks fell by 9.2% during the same period, the study results indicated. Conversely, the sale of untaxed “healthy” beverages increased by 3.5%, water rose by 5.6%, fruit, vegetable or tea drinks rose by 4.3% and plain milk rose by 0.63%, the study said.
The study evaluated changes during the first 12 months of the tax (March 2015-February 2016) from three data sources: beverage prices at a sample 26 Berkeley stores of varying types; point-of-sale scanner data on beverage prices, sales in ounces and store revenue per transaction on 15.5 million checkouts in three Berkeley and six control non-Berkeley large supermarkets in nearby cities; and a smaller before-and-after representative telephone survey of 957 adult Berkeley residents.
The tax costs were passed through to consumers on taxed products in many, but not all, stores, the study said. In the study that included 15.5 million transactions, about two-thirds of the 1c-per-oz tax (0.67c per oz) was passed through to consumers by price increases on the taxed drinks. For soda and energy drinks the tax was fully passed through (1.09c per oz). In the study of 26 stores, the tax was fully passed on in large (1.07c per oz) and small chain supermarkets and chain gas stations (1.31c per oz).
The study was supported by Bloomberg Philanthropies, which has supported soda taxes in the United States and other countries.
Meanwhile, Connecticut state lawmakers are considering a 1c-per-oz tax on caloric sweetened beverages, including sugar, high-fructose corn syrup, honey and maple syrup, according to press reports in the state. The revenue would be used to combat childhood health issues and raise awareness of the importance of a balanced diet. Zero-calorie and diet drinks would not be taxed. The bill was introduced by the state Finance, Revenue and Bonding Committee with a public hearing held April 18. The same bill was proposed in the past but was never approved.
Santa Fe, N.M., votes May 2 on a soda tax to fund pre-kindergarten programs. Politico’s Morning Agriculture reported that two opposing political action committees have taken in a combined $1.6 million in the city’s soda tax battle. The report said the American Beverage Association has contributed at least $800,000 to oppose the tax, and former New York Mayor Michael Bloomberg has provided more than $320,000, mostly for media buys, to support the tax.
Soda taxes in one form or another, some with the intent of improving health and others simply to raise tax revenue, have been approved in San Francisco, Oakland and Albany, Calif., Boulder, Colo., Philadelphia, and Cook County, Ill. Soda taxes are being considered in Seattle, Wash., and in the states of Washington, Massachusetts, Illinois and West Virginia in addition to Connecticut. Mexico and a few other countries currently have soda taxes, while the United Kingdom and South Africa plan to implement soda taxes in 2018.