A new study of Berkeley’s tax on sugary drinks, the first in the nation, suggests it may be accomplishing its goals. The findings come as Seattle weighs a proposal for a similar tax here.
Sales of sugary drinks in Berkeley, Calif., declined nearly 10 percent in the year after the city imposed the nation’s first tax on soda, energy drinks and more, according to a new study.
At the same time, sales of water and other untaxed beverages increased in Berkeley, said the study published Tuesday in the journal PLOS Medicine by researchers at the Public Health Institute in Oakland and the University of North Carolina.
The study, which comes as Mayor Ed Murray proposes a similar tax in Seattle, also concluded that sales of sugar-sweetened beverages increased almost 7 percent in cities outside Berkeley. That suggests some residents may have gone to neighboring communities to buy sugary drinks and avoid the penny-per-ounce tax.
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“I would say the Berkeley tax was a home run,” said Dr. Lynn Silver, an author of the study. “During the first year of the tax, people bought fewer sugary drinks, and more healthy beverages like water, unsweetened teas and milk. Grocery bills did not go up and store revenue did not go down.”
But Silver, a pediatrician, acknowledges the study did not prove the tax caused those results. It could only suggest the changes in sales “may be attributable to the tax.”
Nonetheless, the research likely will have implications for Seattle. The tax Murray has proposed is similar, but steeper — 2 cents per ounce to be levied on sodas, energy drinks, sports drinks, sweetened teas and more. The goal, according to the mayor, is to improve health by reducing consumption of sugary drinks, and fund education programs aimed at improving the graduation rate of minority youth.
Beverage-industry representatives, Teamster local unions and small-business owners have complained the tax would eliminate jobs and unfairly burden soda drinkers.
Silver downplayed the notion that Berkeley residents drove the increased sales of sugary drinks in neighboring communities in the first year of the tax. “While it’s not out of the question some of that was probably going on, it was not on a very large scale,” she said.
Overall beverage sales went up in Berkeley, she said, which would be unlikely if lots of residents were buying sugary drinks outside the city. And in phone interviews residents did not report changes in where they shopped, according to the study, primarily funded by Bloomberg Philanthropies.
Silver donated to the campaign for Berkeley’s tax, first implemented in 2015, and advocated for it. She’s also been a consultant to the World Health Organization, which has stated that sugary drinks have little nutritional value and increase the risk of obesity and diabetes.
The first of its kind in the U.S., the California study relied on checkout data gathered from two supermarket chains and their stores in Berkeley and nearby cities. In all, 15.5 million supermarket checkout transactions were studied.
“Two chains very generously trusted us with their data,” Silver said. In return, she said, researchers promised not to name the chains.
Separate research on 26 Berkeley stores showed the tax was largely passed on to consumers in the price of sugary drinks.
The supermarket data showed that sugary-drink sales declined 9.6 percent in Berkeley while sales of untaxed drinks rose 3.5 percent in the city, with sales of water leading that increase.
Adam Drewnowski, a University of Washington professor of epidemiology and director of the UW’s Center for Public Health Nutrition, said those results don’t necessarily show changes in consumption habits.
“First, analyses of sales data aggregated by store do not tell you whether it was the same consumers who replaced sugary beverages with water. All you know is that product X went down whereas product Y went up,” Drewnowski said in an email.
And, he said, Berkeley is not typical of American consumers. Its residents drink about one-third as much in sugary beverages as the average American. They are more likely to drink water, regardless of a tax, than lower-income Americans, he said.
He has also suggested Seattle’s proposed tax is elitist and doesn’t address some of the most pressing problems in low-income communities with above-average rates of soda consumption, obesity and diabetes.
Drewnowski’s latest study, published this month, found that wealthy city dwellers in Mexico drink more soda than the rural poor. “So our conclusion was that (unlike Seattle) the soda tax in Mexico was an example of progressive taxation,” he wrote.
In that study, Drewnowski disclosed that he has received funding from food, beverage and ingredient companies.
Silver said more research is needed to show what is replacing sugary drinks in some people’s diets. Her study also said sugary-drink taxes need to be evaluated in cities or jurisdictions with more typical consumption habits than Berkeley.
A spokesman for Murray responded to the study with this statement: “This study shows the potential health benefits, including lowering the amount of sugary drinks people consume and increasing how much water people drink. And with the revenue generated we will fund programs that help underserved communities through education, building healthier lives.”
Murray plans to get details of his proposed tax to the City Council this month, according to the spokesman.
The American Beverage Association provided this statement:
“Berkeley’s relatively small size, high median income and low baseline consumption rates make it a challenging place to determine the true impact of a beverage tax — unlike Philadelphia, where the tax has led to significant job losses and economic hardship for working families. This study does, however, confirm that sales of taxed beverages inside the city declined while sales of those same beverages outside the city increased, which is also what is happening in Philadelphia.”