The impact of the Oakland SSB tax on prices and volume sold: A study of intended and unintended consequences

A Sugar-Sweetened Beverage Excise Tax in California: Projected Benefits for Population Obesity and Health Equity

INTRODUCTION

Amid the successes of local sugar-sweetened beverage (SSB) taxes, interest in state-wide policies has grown. This study evaluated the cost effectiveness of a hypothetical 2-cent-per-ounce excise tax in California and its implications for population health and health equity.

METHODS

Using the Childhood Obesity Intervention Cost-Effectiveness Study microsimulation model, tax impacts on health, health equity, and cost effectiveness over 10 years in California were projected, both overall and stratified by race/ethnicity and income. Expanding on previous models, differences in the effect of intake of SSBs on weight by BMI category were incorporated. Costing was performed in 2020, and analyses were conducted in 2021-2022.

RESULTS

The tax is projected to save $4.55 billion in healthcare costs, prevent 266,000 obesity cases in 2032, and gain 114,000 quality-adjusted life years. Cost-effectiveness metrics, including cost/quality-adjusted life year gained, were cost saving. Spending on SSBs was projected to decrease by $33 per adult and $26 per child overall in the first year. Reductions in obesity prevalence for Black and Hispanic Californians were 1.8 times larger than for White Californians, and reductions for adults with lowest incomes (<130% Federal Poverty Level) were 1.4 times the reduction among those with highest incomes (>350% Federal Poverty Level). The tax is projected to save $112 in obesity-related healthcare costs per $1 invested.

CONCLUSIONS

A state-wide SSB tax in California would be cost saving, lead to reductions in obesity and improvement in SSB-related health equity, and lead to overall improvements in population health. The policy would generate more than $1.6 billion in state tax revenue annually that can also be used to improve health equity.

Impact of soda tax on beverage price, sale, purchase, and consumption in the US: a systematic review and meta-analysis of natural experiments

Background

As a primary source of added sugars in the US diet, sugar-sweetened beverage (SSB) consumption is presumed to contribute to obesity prevalence and poor oral health. We systematically synthesized and quantified evidence from US-based natural experiments concerning the impact of SSB taxes on beverage prices, sales, purchases, and consumption.

Methods

A keyword and reference search was performed in PubMed, Web of Science, Cochrane Library, Scopus, and EconLit from the inception of an electronic bibliographic database to Oct 31, 2022. Meta-analysis was conducted to estimate the pooled effect of soda taxes on SSB consumption, prices, passthrough rate, and purchases.

Results

Twenty-six natural experiments, all adopting a difference-in-differences approach, were included. Studies assessed soda taxes in Berkeley, Oakland, and San Francisco in California, Philadelphia in Pennsylvania, Boulder in Colorado, Seattle in Washington, and Cook County in Illinois. Tax rates ranged from 1 to 2 ¢/oz. The imposition of the soda tax was associated with a 1.06 ¢/oz. (95% confidence interval [CI] = 0.90, 1.22) increase in SSB prices and a 27.3% (95% CI = 19.3, 35.4%) decrease in SSB purchases. The soda tax passthrough rate was 79.7% (95% CI = 65.8, 93.6%). A 1 ¢/oz. increase in soda tax rate was associated with increased prices of SSBs by 0.84 ¢/oz (95% CI = 0.33, 1.35).

Conclusion

Soda taxes could be effective policy leverage to nudge people toward purchasing and consuming fewer SSBs. Future research should examine evidence-based classifications of SSBs, targeted use of revenues generated by taxes to reduce health and income disparities, and the feasibility of redesigning the soda tax to improve efficiency.

The impact of the Oakland sugar-sweetened beverage tax on price promotions of sugar-sweetened and alternative beverages

The goal of sugar-sweetened beverage (SSB) taxes is to raise the prices of SSBs to decrease consumption. Price promotions play an important role in the sales of SSBs and could potentially be used by manufacturers to weaken the impact of such taxes. The purpose of this study is to determine how price promotions changed after the introduction of the 2017 Oakland SSB tax. A difference-in-differences study design was used to compare changes in prices and the prevalence and amount of price promotions for beverages in Oakland, California, relative to Sacramento, California, using two different datasets. Nielsen Retail Scanner data included price promotions for beverages sold and store audit data included price promotions offered by retailers. Changes were analyzed for SSBs, noncalorically sweetened beverages, and unsweetened beverages. After the implementation of the tax, the prevalence of price promotions for SSBs did not change significantly in Oakland relative to the comparison site of Sacramento. However, the depth of price promotions increased by an estimated 0.35 cents per ounce (P<0.001) based on the Nielsen retail scanner data and by 0.39 cents per ounce (P<0.001) based on the store audit data. This increase in the amount by which SSBs were price promoted following the introduction of the Oakland SSB tax may reflect a strategy by manufacturers to weaken the tax and/or retailers to bolster demand.

Developing Effective Strategies for Obesity Prevention

Nutrition policies can work with clinical treatments to address the obesity epidemic. The United States has passed beverage taxes at the local level and calorie labeling mandates at the federal level to encourage healthier consumption. Nutritional changes to federal nutrition programs have been either implemented or suggested; evidence shows that the changes that have been implemented have resulted in improvements in diet quality and are cost-effective in decreasing the increase in obesity prevalence. A comprehensive policy agenda that addresses risk of obesity on multiple levels of the food supply will have meaningful long-term effects on obesity prevalence.

Evaluation of the sugar-sweetened beverage tax in Oakland, United States, 2015-2019: A quasi-experimental and cost-effectiveness study

BACKGROUND

While a 2021 federal commission recommended that the United States government levy a sugar-sweetened beverage (SSB) tax to improve diabetes prevention and control efforts, evidence is limited regarding the longer-term impacts of SSB taxes on SSB purchases, health outcomes, costs, and cost-effectiveness. This study estimates the impact and cost-effectiveness of an SSB tax levied in Oakland, California.

METHODS AND FINDINGS

An SSB tax ($0.01/oz) was implemented on July 1, 2017, in Oakland. The main sample of sales data included 11,627 beverage products, 316 stores, and 172,985,767 product-store-month observations. The main analysis, a longitudinal quasi-experimental difference-in-differences approach, compared changes in beverage purchases at stores in Oakland versus Richmond, California (a nontaxed comparator in the same market area) before and 30 months after tax implementation (through December 31, 2019). Additional estimates used synthetic control methods with comparator stores in Los Angeles, California. Estimates were inputted into a closed-cohort microsimulation model to estimate quality-adjusted life years (QALYs) and societal costs (in Oakland) from 6 SSB-associated disease outcomes. In the main analysis, SSB purchases declined by 26.8% (95% CI -39.0 to -14.7, p < 0.001) in Oakland after tax implementation, compared with Richmond. There were no detectable changes in purchases of untaxed beverages or sweet snacks or purchases in border areas surrounding cities. In the synthetic control analysis, declines in SSB purchases were similar to the main analysis (-22.4%, 95% CI -41.7% to -3.0%, p = 0.04). The estimated changes in SSB purchases, when translated into declines in consumption, would be expected to accrue QALYs (94 per 10,000 residents) and significant societal cost savings (>$100,000 per 10,000 residents) over 10 years, with greater gains over a lifetime horizon. Study limitations include a lack of SSB consumption data and use of sales data primarily from chain stores.

CONCLUSIONS

An SSB tax levied in Oakland was associated with a substantial decline in volume of SSBs purchased, an association that was sustained more than 2 years after tax implementation. Our study suggests that SSB taxes are effective policy instruments for improving health and generating significant cost savings for society.

Changes in sugar-sweetened beverage consumption in the first two years (2018 - 2020) of San Francisco's tax: A prospective longitudinal study

BACKGROUND

Sugar sweetened beverage (SSB) taxes are a promising strategy to decrease SSB consumption, and their inequitable health impacts, while raising revenue to meet social objectives. In 2016, San Francisco passed a one cent per ounce tax on SSBs. This study compared SSB consumption in San Francisco to that in San José, before and after tax implementation in 2018.

METHODS & FINDINGS

A longitudinal panel of adults (n = 1,443) was surveyed from zip codes in San Francisco and San José, CA with higher densities of Black and Latino residents, racial/ethnic groups with higher SSB consumption in California. SSB consumption was measured at baseline (11/17-1/18), one- (11/18-1/19), and two-years (11/19-1/20) after the SSB tax was implemented in January 2018. Average daily SSB consumption (in ounces) was ascertained using the BevQ-15 instrument and modeled as both continuous and binary (high consumption: ≥6 oz (178 ml) versus low consumption: <6 oz) daily beverage intake measures. Weighted generalized linear models (GLMs) estimated difference-in-differences of SSB consumption between cities by including variables for year, city, and their interaction, adjusting for demographics and sampling source. In San Francisco, average SSB consumption in the sample declined by 34.1% (-3.68 oz, p = 0.004) from baseline to 2 years post-tax, versus San José which declined 16.5% by 2 years post-tax (-1.29 oz, p = 0.157), a non-significant difference-in-differences (-17.6%, adjusted AMR = 0.79, p = 0.224). The probability of high SSB intake in San Francisco declined significantly more than in San José from baseline to 2-years post-tax (AOR[interaction] = 0.49, p = 0.031). The difference-in-differences of odds of high consumption, examining the interaction between cities, time and poverty, was far greater (AOR[city*year 2*federal poverty level] = 0.12, p = 0.010) among those living below 200% of the federal poverty level 2-years post-tax.

CONCLUSIONS

Average SSB intake declined significantly in San Francisco post-tax, but the difference in differences between cities over time did not vary significantly. Likelihood of high SSB intake declined significantly more in San Francisco by year 2 and more so among low-income respondents.

Systematic review on fiscal policy interventions in nutrition

Introduction

Both the World Health Organization and the Lancet Series on Adolescent nutrition recommend that governments adopt fiscal policies to combat diet-related non-communicable diseases (NCDs). However, rigorous, systematic evidence regarding the effects of these interventions is lacking.

Methods

We synthesize the available evidence regarding the impacts of taxes and subsidies that directly affect consumer prices on availability and accessibility of foods and beverages, purchasing behavior, diet quality, health and well-being outcomes as well as considerations for implementation, sustainability and equity.

Results

Our initial search returned 2,113 de-duplicated studies, and ultimately 24 impact evaluations and two systematic reviews met final eligibility criteria and represented unique evaluations. Our meta-analysis of these studies suggests that taxes may decrease purchases of taxed beverages (SMD = -0.14 [95% CI: -0.29 to -0.07], n = 15). Results should be interpreted cautiously due to considerable heterogeneity (Q(14) = 335.19, p = 0.01,τ ^ 2 = 0.03 , I 2 = 95.82%).

Discussion

The evidence base is too limited to draw conclusions about the effects of taxes on beverages and calorie-dense foods on purchases, or on the effects of subsidies on purchasing or diet quality. Overall, the evidence base is inconclusive on whether fiscal policies can meaningfully influence the availability and accessibility of foods and beverages, diet quality, and health outcomes. Policymakers implementing fiscal policies should consider information campaigns on health benefits and health risks associated with certain food and beverage consumption. For taxes, exposure to health information may amplify signaling effects of taxes and reduce avoidance behaviors, such as cross-border shopping. Future evaluations should diversify data sources to better understand impacts on diet and health outcomes.

Sustained Impact of the Philadelphia Beverage Tax on Beverage Prices and Sales Over 2 Years

INTRODUCTION

It is unclear whether changes in beverage price and sales after beverage tax implementation can be sustained long term. This study aims to quantify the changes in beverage prices and sales in large retailers 2 years after the implementation of the 1.5 cents per ounce Philadelphia beverage tax.

METHODS

Data on price and volume sales of beverages and potential food substitutes were collected from 109 supermarkets, 45 mass merchandizers, and 350 pharmacies in Philadelphia, Baltimore (control), and Pennsylvania ZIP codes bordering Philadelphia (to investigate potential cross-border shopping for tax avoidance). Difference-in-differences analyses compared beverage prices and volume sales in the year before tax implementation (2016) to 2 years after (2018). Data were analyzed in 2020-2021.

RESULTS

Difference-in-differences analyses found that after tax implementation, taxed beverage prices in Philadelphia increased by 1.02 cents per ounce (95% CI=0.94, 1.11; 68% pass through), and taxed beverage volume sales in stores decreased by 50% (95% CI=36%, 61%). After accounting for cross-border shopping, taxed beverage volume sales decreased in Philadelphia by 35% in 2018. Volume sales of nontaxed beverages did not change after tax implementation (difference-in-differences=4%, 95% CI= -3%, 12%). Volume sales of nontaxed beverage concentrates increased on average by 34% (95% CI=19%, 51%), but there was no evidence of substitution to high-calorie foods.

CONCLUSIONS

There was a large reduction in taxed beverage volume sales 2 years after Philadelphia tax implementation, even after accounting for cross-border shopping. Increases in nontaxed beverage concentrate sales likely partially offset this decline, but there was no evidence of post-tax food substitution.

Purchases of Nontaxed Foods, Beverages, and Alcohol in a Longitudinal Cohort After Implementation of the Philadelphia Beverage Tax

BACKGROUND

Evidence suggests that sweetened beverage taxes reduce taxed beverage purchases, but few studies have used individual-level data to assess whether these taxes affect purchases of nontaxed foods, beverages, and alcohol. Additionally, research has not examined whether sweetened beverage taxes influence restaurant purchases.

OBJECTIVES

We assessed changes in individuals' purchases of taxed beverage types; low-calorie/low-added-sugar nontaxed beverages; high-calorie/high-added-sugar nontaxed beverages, foods, and alcohol; and beverages from restaurants following implementation of the 1.5 cent-per-ounce Philadelphia sweetened beverage tax.

METHODS

A longitudinal cohort of adult sugar-sweetened beverage consumers in Philadelphia (n = 306; 67% female; mean age: 43.9 years) and Baltimore (n = 297; comparison city without a beverage tax; 58% female; mean age: 41.7 years) submitted all food and beverage receipts during 2-week periods at baseline and at 3, 6, and 12 months posttax. Difference-in-differences analyses compared changes in purchases from pre- to posttax in Philadelphia to changes in Baltimore.

RESULTS

Purchases of taxed juice drinks [ratio of incidence rate ratios (RIRR) = 0.62; 95% CI, 0.42-0.91], but not other taxed beverage types, decreased in Philadelphia compared to Baltimore following the tax. Analyses did not find changes in purchases of low-calorie/low-added-sugar nontaxed beverages, such as water or milk. Additionally, analyses did not find increases in purchases of most high-calorie/high-added-sugar nontaxed products, including alcohol, juice, candy, sweet snacks, salty snacks, and desserts. Purchases of beverage concentrates increased in Philadelphia (RIRR = 2.22; 95% CI, 1.39-3.54).

CONCLUSIONS

In this difference-in-differences analysis, the Philadelphia beverage tax was associated with reduced purchases of taxed juice drinks. Purchases of beverage concentrates increased after the tax, but no increases were observed for other high-calorie/high-added-sugar nontaxed foods, beverages, or alcohol.

Linking a sugar-sweetened beverage tax with fruit and vegetable subsidies: A simulation analysis of the impact on the poor

BACKGROUND

US individuals, particularly from low-income subpopulations, have very poor diet quality. Policies encouraging shifts from consuming unhealthy food towards healthy food consumption are needed.

OBJECTIVES

We simulate the differential impacts of a national sugar-sweetened beverage (SSB) tax and combinations of SSB taxes with fruit and vegetable (FV) subsidies targeted to low-income households on SSB and FV purchases of lower and higher SSB purchasers.

METHODS

We considered a 1-cent-per-ounce SSB tax and 2 FV subsidy rates of 30% and 50% and used longitudinal grocery purchase data for 79,044 urban/semiurban US households from 2010-2014 Nielsen Homescan data. We used demand elasticities for lower and higher SSB purchasers, estimated via longitudinal quantile regression, to simulate policies' differential effects.

RESULTS

Higher-SSB-purchasing households made larger reductions (per adult equivalent) in SSB purchases than lower SSB purchasers due to the tax (e.g., 4.4 oz/day at SSB purchase percentile 90 compared with 0.5 oz/day at percentile 25; P < 0.05). Our analyses by household income indicated low-income households would make larger reductions than higher-income households at all SSB purchase levels. Targeted FV subsidies induced similar, but nutritionally insignificant, increases in FV purchases of low-income households, regardless of their SSB purchase levels. Subsidies, however, were effective in mitigating the tax burdens. All low-income households experienced a net financial gain when the tax was combined with a 50% FV subsidy, but net gains were smaller among higher SSB purchasers. Further, low-income households with children gained smaller net financial benefits than households without children and incurred net financial losses under a 30% subsidy rate.

CONCLUSIONS

SSB taxes can effectively reduce SSB consumption. FV subsidies would increase FV purchases, but nutritionally meaningful increases are limited due to low purchase levels before policy implementation. Expanding taxes beyond SSBs, providing larger FV subsidies, or offering subsidies beyond FVs, particularly for low-income households with children, may be more effective.

Longer-term impacts of the Oakland, California, sugar-sweetened beverage tax on prices and volume sold at two-years post-tax

Sugar-sweetened beverage (SSB) consumption is associated with obesity and independently associated with type 2 diabetes and cardiovascular disease. Not only is obesity a growing public health problem, but it is also most recently associated with increased risk of severe illness from COVID-19. Taxes on SSBs are a policy tool used to help curb SSB consumption and are currently implemented in 7 U.S. cities and more than 40 countries. On July 1, 2017, Oakland, California, implemented a 1-cent/ounce tax on SSBs with ≥25 kilocalories/12 ounces. This study estimated the impact of the Oakland tax on prices, volume sold, and cross-border shopping two-years post-tax relative to one-year pre-tax. Universal product code-level Nielsen retail scanner data on non-alcoholic beverage sales were analyzed using a difference-in-differences design with Sacramento, California, as the comparison site. Taxed beverage prices increased by 0.67 cents/ounce, on average, in Oakland relative to Sacramento, corresponding to 67% pass-through. Taxed beverage volume sold decreased by 18% in Oakland relative to Sacramento, with a larger decrease for family-size beverages (23%) relative to individual-size beverages (8%). There was a 9% increase in volume sold of taxed beverages in the two-mile border area surrounding Oakland relative to the Sacramento border area, driven by a 12% increase for family-size taxed beverages. After accounting for this cross-border shopping, there was a net decrease of 6% in taxed beverage volume sold in Oakland. There was no significant change in untaxed beverage volume sold in either Oakland or its border area relative to their respective comparison sites, suggesting there was no substitution to untaxed beverages and cross-border shopping may have been limited to taxed beverages. This two-year post-tax study of the Oakland SSB tax adds to the limited number of longer-term evaluations of local U.S. SSB taxes.

Evaluation of Changes in Grams of Sugar Sold After the Implementation of the Seattle Sweetened Beverage Tax

IMPORTANCE

Adults and children routinely exceed recommended intake amounts of added sugars established by dietary guidelines. Taxes are used as a policy tool to reduce demand for sugar-sweetened beverages (SSBs) given consumption-related adverse health outcomes but may induce substitution to other sources of added sugars.

OBJECTIVE

To examine the extent to which changes in grams of sugar sold from taxed beverages may be offset by changes in grams of sugar sold from untaxed beverages, sweets, and stand-alone sugar after the implementation of the Seattle, Washington, Sweetened Beverage Tax (SBT) on January 1, 2018.

DESIGN, SETTING, AND PARTICIPANTS

This study used difference-in-differences analyses to examine changes in grams of sugar sold from taxed and untaxed products in Seattle compared with Portland, Oregon, at year 1 and year 2 post tax. This study used Nielsen scanner data from supermarkets and mass merchandise as well as grocery, drug, convenience, and dollar stores on unit sales and measurements for beverage and food product universal product codes (UPCs) for each site for the pretax period (January 8-December 30, 2017) and the corresponding weeks in year 1 post tax (2018) and in year 2 post tax (2019). Nutritional analyses assessed grams of sugar for each UPC. The analytical balanced sample included 1326 taxed beverage UPCs, 239 untaxed beverage UPCs, 2054 sweets UPCs, and 81 stand-alone sugar UPCs. Statistical analysis was performed from January to August 2021.

EXPOSURES

Implementation of the Seattle SBT.

MAIN OUTCOMES AND MEASURES

Changes in grams of sugar sold from taxed beverages, untaxed beverages, sweets, and stand-alone sugar.

RESULTS

At both year 1 and year 2 post tax in Seattle compared with Portland, grams of sugar sold from taxed beverages decreased 23% (year 2 posttax ratio of incidence rate ratios [RIRR] = 0.77; 95% CI, 0.73-0.80). Sugar sold from untaxed beverages increased at year 1 post tax by 4% (RIRR = 1.04; 95% CI, 1.00-1.07) with no change at year 2 post tax. Sugar sold from sweets increased by 4% at both year 1 and year 2 post tax (year 2 posttax RIRR = 1.04; 95% CI, 1.03-1.06). There were no changes in stand-alone sugar sold.

CONCLUSIONS AND RELEVANCE

This study using difference-in-differences analysis found a net 19% reduction in grams of sugar sold from taxed SSBs at year 2 post tax after accounting for changes in sugar sold from untaxed beverages, sweets, and stand-alone sugar. These results suggest that SSB taxes may effectively yield permanent reductions in added sugars sold from SSBs in food stores.

Philadelphia's Excise Tax on Sugar-Sweetened and Artificially Sweetened Beverages and Supplemental Nutrition Assistance Program Benefit Redemption

Objectives. To assess the effect of a 2017 excise tax on sugar and artificially sweetened beverages in Philadelphia, Pennsylvania, on the shopping patterns of low-income populations using Supplemental Nutrition Assistance Program (SNAP) data. Methods. I used a synthetic controls approach to estimate the effect of the tax on Philadelphia and neighboring Pennsylvania counties (Bucks, Delaware, and Montgomery) as measured by total SNAP sales ("SNAP redemption") and SNAP redemption per SNAP participant. I assembled biannual data (2005-2019) from all US counties for SNAP redemption and relevant predictors. I performed placebo tests to estimate statistically significant effects and conducted robustness checks. Results. Detectable increases in SNAP spending occurred in all 3 Philadelphia neighboring counties. Per-participant SNAP spending increased in 2 of the neighboring counties and decreased in Philadelphia. These effects were robust across multiple specifications and placebo tests. Conclusions. The tax contributed to increased SNAP shopping in Philadelphia's neighboring counties across both outcome measures, and decreased spending in Philadelphia (at least by 1 measure). This raises questions about retailer behavior, the effectiveness of the tax's public health aim of reducing sugar-sweetened beverage consumption, and policy aims of investing in low-income communities. (Am J Public Health. 2021;111(11):1986-1996. https://doi.org/10.2105/AJPH.2021.306464).