A new study from the University of Georgia analysing more than 804 million weekly reports on purchasing suggests that tax on soft drinks may not be improving diets in the way it was intended.
In UK law manufacturers of soft drinks which contain more than 5g of sugar per 100 ml must pay a levy of 18p a liter, or 24p a liter for sugar over 8g per 100ml. Most manufacturers have passed this cost on to the consumer, causing a surge in prices across most soft drinks. It was hoped that this price increase would decrease the frequency of indulging in these drinks.
Analysing data following a tax levied in Philadelphia, showed that consumption reduced by 31 per cent. A figure which is in line with previous research.
In response Philadelphia residents drive to neighboring towns to get their sugar fix causing a four per cent increase in purchases of other high-sugar goods in the surrounding area.
Many Philadelphia residents also sought cheaper, artificially sweetened options to replace their favorite soft drinks. Subsequently, sweetened foods saw a 40 per cent rise in purchases.
“Can we influence behavior through taxation? Yes, but only if you enact a policy at broader levels of government, such as at the state or national level that prevents people from cross-border shopping,” said Felipe Lozano-Rojas, lead author of the study and an assistant professor in the School of Public and International Affairs. “The answer is no if you’re enacting these policies at a local level.”