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Jun 20, 2019 / Richard Hall

Do soft drinks sugar taxes work ?

It seems yes, to some extent, in:

• encouraging product reformulation with less sugar

• increasing price differentiation according to sugar levels

• accentuating consumer behaviour change towards lower sugar products

• raising money for government.

It seems no, to an arguably greater extent, in :

• not materially reducing obesity

• distracting attention from whole diet change

• creating product substitution at extra cost without extra health benefit

• hurting poorer consumers more.

The latest analysis of the Philadelphia tax shows local ‘sugary beverage’ sales fell by 51%, but:

• Local supermarkets also lost out on other food and household sales.

• “Supermarkets bordering Philadelphia, however, had an increase of similar magnitude in combined sales.”

• “The tax has also created a black market” with “white trucks and vans parked all over …”

• This has led to a “zero shift in what people are drinking.”

Ironically, Seattle City Council is expecting its soda tax revenue to increase in 2019. If the tax rate hasn’t risen, that must mean sales have.

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