El Estoque

Why taxing sugary drinks may not be a good idea


"Tax Bill" by Images Money is licensed under CC BY 2.0

"Tax Bill" by Images Money is licensed under CC BY 2.0

Daniel Lin

[dropcap]I[/dropcap]n November 2016 the City of San Francisco passed a ballot measure that would impose a 1 cent per ounce tax on distributors of soda and sugary beverages. The argument for the measure was that it would reduce health problems such as diabetes, obesity and dental decay, which typically drive up healthcare costs for the community. The argument against the proposal was that such a tax was that it would hurt small businesses due to rising costs.

A study published in the Journal of Epidemiology & Community Health in late January reveals that increasing the price of certain sugary drinks may have an unintended consequence: increasing alcohol purchases.

To determine this correlation, researchers used data from Kantar WorldPanel, which contains information about approximately 32,000 households in Great Britain, including number of children, social class and geographical region. Furthermore, the data set includes information on every single transaction from corner shops, supermarkets and major retailers.

Using this data, researchers have concluded that when prices of high-sugar drinks surged, the purchase of lager increased. Furthermore, when the price of diet and low-sugar drinks increased, the number of beers, ciders and wines increased as well. The effects of price rises were felt strongest among low-income groups.

The study does reveal that taxes on sugary drinks do not always lead to an increase in alcohol purchases. Medium-sugar drinks (5–8 g sugar/100 mL) reduced the amount of alcohol purchased. According to the study, taxing these medium-sugar drinks potentially “have a multiplier-effect beneficial to health.”

This finding may come as a surprise to policymakers and citizens who believe that soda taxes should be a swift and absolute victory for public health. According to the Centers for Disease Control and Prevention, long term health risks of excessive alcohol can leave to a number of cancers, heart and blood problems, as well as reduced cognitive functions. While certain health policies appear to be clear-cut, sometimes their consequences are less than ideal. As such, this study should be a wake-up call to lawmakers to draft bills with this study in mind to stop preventable issues to public health.