Association of a Beverage Tax on Sugar-Sweetened and Artificially Sweetened Beverages With Changes in Beverage Prices and Sales at Chain Retailers in a Large Urban Setting

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Abstract

<p class="first" id="d748021e315">This study examines prices and sales of sweetened beverages before and after implementation of a excise tax in Philadelphia, intended to reduce unhealthful drink consumption, and compares it with sales in Baltimore, which did not institute the same tax. </p><div class="section"> <a class="named-anchor" id="ab-joi190037-1">  </a> <h5 class="section-title" id="d748021e321">Question</h5> <p id="d748021e323">What was the association between a beverage excise tax on sugar-sweetened and artificially sweetened beverages implemented in Philadelphia in 2017 with changes in beverage prices and volume of sales? </p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-2">  </a> <h5 class="section-title" id="d748021e326">Findings</h5> <p id="d748021e328"> In this difference-in-differences analysis of retailer sales data in the year before and the year after implementation of an excise tax of 1.5 cents per ounce on sugar-sweetened and artificially sweetened beverages, the tax was associated with significant increases in price-per-ounce of 0.65 cents at supermarkets, 0.87 cents by mass merchandise stores, and 1.56 cents at pharmacies. Total volume sales of taxed beverages in Philadelphia decreased by 1.3 billion ounces after tax implementation (51%), but sales in Pennsylvania border zip codes increased by 308.2 million ounces, partially offsetting the decrease in Philadelphia’s volume sales by 24.4%. </p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-3">  </a> <h5 class="section-title" id="d748021e331">Meaning</h5> <p id="d748021e333">A beverage excise tax on sugar-sweetened and artificially sweetened beverages in a large urban setting was associated with a significant increase in beverage prices and a significant reduction in volume sales of taxed beverages, although changes in sales volume were partially offset by purchases in neighboring areas. </p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-4">  </a> <h5 class="section-title" id="d748021e337">Importance</h5> <p id="d748021e339">Policy makers have implemented beverage taxes to generate revenue and reduce consumption of sweetened drinks. In January 2017, Philadelphia, Pennsylvania, became the second US city to implement a beverage excise tax (1.5 cents per ounce). </p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-5">  </a> <h5 class="section-title" id="d748021e342">Objectives</h5> <p id="d748021e344">To compare changes in beverage prices and sales following the implementation of the tax in Philadelphia compared with Baltimore, Maryland (a control city without a tax) and to assess potential cross-border shopping to avoid the tax in neighboring zip codes. </p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-6">  </a> <h5 class="section-title" id="d748021e347">Design, Setting, and Participants</h5> <p id="d748021e349">This study used a difference-in-differences approach and analyzed sales data to compare changes between January 1, 2016, before the tax, and December 31, 2017, after the tax. Differences by store type, beverage sweetener status, and beverage size were examined. The commercial retailer sales data included large chain store sales in Philadelphia, Baltimore, and the Pennsylvania zip codes bordering Philadelphia. These data reflect approximately 25% of the ounces of taxed beverages sold in Philadelphia. </p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-7">  </a> <h5 class="section-title" id="d748021e352">Exposures</h5> <p id="d748021e354">Philadelphia’s tax on sugar-sweetened and artificially sweetened beverages.</p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-8">  </a> <h5 class="section-title" id="d748021e357">Main Outcomes and Measures</h5> <p id="d748021e359">Change in taxed beverage prices and volume sales.</p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-9">  </a> <h5 class="section-title" id="d748021e362">Results</h5> <p id="d748021e364">A total of 291 stores (54 supermarkets, 20 mass merchandise stores, 217 pharmacies) were analyzed. The mean price per ounce of taxed beverages in Philadelphia increased from 5.43 cents in 2016 to 6.24 cents in 2017 at supermarkets; from 5.28 cents to 6.24 cents at mass merchandise stores, and from 6.60 cents to 8.28 cents at pharmacies. The mean price per ounce in Baltimore increased from 5.33 cents in 2016 to 5.50 cents in 2017 at supermarkets, from 6.34 cents to 6.52 cents at mass merchandise stores, and from 6.76 cents to 6.93 cents at pharmacies. The mean per-ounce difference in price between the 2 cities was 0.65 cents (95% CI, 0.60 cents-0.69 cents; <i>P</i><.001) at supermarkets; 0.87 cents (95 % CI, 0.72 cents-1.02 cents; <i>P</i><.001) at mass merchandise stores, and 1.56 cents (95% CI, 1.50 cents-1.62 cents; <i>P</i><.001) at pharmacies. Total volume sales of taxed beverages in Philadelphia decreased by 1.3 billion ounces (from 2.475 billion to 1.214 billion) or by 51.0% after tax implementation. Volume sales in the Pennsylvania border zip codes, however, increased by 308.2 million ounces (from 713.1 million to 1.021 billion), offsetting the decrease in Philadelphia's volume sales by 24.4%. In Philadelphia, beverage volume sales in ounces per 4-week period between before and after tax periods decreased from 4.85 million to 1.99 million at supermarkets, from 2.98 million to 1.72 million at mass merchandise stores, and from 0.16 million to 0.13 million at pharmacies. In Baltimore, the beverage volume sales in ounces decreased from 2.83 million to 2.81 million at supermarkets, from 1.05 million to 1.00 million at mass merchandise stores, and from 0.14 million to 0.13 million at pharmacies. This was a 58.7% reduction at supermarkets (difference-in-differences, −2.85 million ounces; 95% CI, −4.10 million to −1.60 million ounces; <i>P</i> < .001), 40.4% reduction at mass merchandise stores (difference-in-differences, −1.20 million ounces; 95% CI, −2.04 million to −0.36 million ounces; <i>P</i> = .001), and 12.6% reduction in pharmacies (difference-in-differences, −0.02 million ounces; 95% CI, −0.03 million to −0.01 million ounces; <i>P</i> < .001). </p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-10">  </a> <h5 class="section-title" id="d748021e386">Results</h5> <p id="d748021e388">A total of 291 stores (54 supermarkets, 20 mass merchandisers, 217 pharmacies) were analyzed. In Philadelphia and Baltimore, the mean price per ounce of taxed beverages increased at all stores in the after-tax periods and taxed beverage volume sales per 4-week period decreased in all store types. Compared with Baltimore, Philadelphia experienced significantly greater increases in taxed beverage prices and significantly larger declines in volume of taxed beverages sold in the after-tax period. </p> <div class="table-wrap panel" id="joi190037ta"> <a class="named-anchor" id="joi190037ta">  </a> <div class="panel-content"> <div class="table-container"> <table class="table-figure"> <col width="32.57%"/> <col width="11.24%"/> <col width="12.17%"/> <col width="8.43%"/> <col width="8.43%"/> <col width="27.16%"/> <thead> <tr> <th colspan="1" rowspan="2" scope="col" valign="top"/> <th colspan="2" rowspan="1" scope="colgroup" valign="top">Philadelphia</th> <th colspan="2" rowspan="1" scope="colgroup" valign="top">Baltimore</th> <th colspan="1" rowspan="2" scope="col" valign="top">Difference-in-Differences (95% CI)</th> </tr> <tr> <th colspan="1" rowspan="1" scope="colgroup" valign="top">2016</th> <th colspan="1" rowspan="1" scope="col" valign="top">2017</th> <th colspan="1" rowspan="1" scope="col" valign="top">2016</th> <th colspan="1" rowspan="1" scope="col" valign="top">2017</th> </tr> </thead> <tbody> <tr> <td colspan="6" rowspan="1" scope="col" valign="top">Mean price, cents per ounce</td> </tr> <tr> <td colspan="1" rowspan="1" scope="row" valign="top"> Supermarkets</td> <td colspan="1" rowspan="1" valign="top">5.43</td> <td colspan="1" rowspan="1" valign="top">6.24</td> <td colspan="1" rowspan="1" valign="top">5.33</td> <td colspan="1" rowspan="1" valign="top">5.50</td> <td colspan="1" rowspan="1" valign="top">0.65 (0.60 to 0.69)</td> </tr> <tr> <td colspan="1" rowspan="1" scope="row" valign="top"> Mass merchandise stores</td> <td colspan="1" rowspan="1" valign="top">5.28</td> <td colspan="1" rowspan="1" valign="top">6.24</td> <td colspan="1" rowspan="1" valign="top">6.34</td> <td colspan="1" rowspan="1" valign="top">6.52</td> <td colspan="1" rowspan="1" valign="top">0.87 (0.72 to 1.02)</td> </tr> <tr> <td colspan="1" rowspan="1" scope="row" valign="top"> Pharmacies</td> <td colspan="1" rowspan="1" valign="top">6.60</td> <td colspan="1" rowspan="1" valign="top">8.28</td> <td colspan="1" rowspan="1" valign="top">6.76</td> <td colspan="1" rowspan="1" valign="top">6.93</td> <td colspan="1" rowspan="1" valign="top">1.56 (1.50 to 1.62)</td> </tr> <tr> <td colspan="6" rowspan="1" scope="col" valign="top">Mean volume sales, oz in millions per 4-wk period</td> </tr> <tr> <td colspan="1" rowspan="1" scope="row" valign="top"> Supermarkets</td> <td colspan="1" rowspan="1" valign="top">4.85</td> <td colspan="1" rowspan="1" valign="top">1.99</td> <td colspan="1" rowspan="1" valign="top">2.83</td> <td colspan="1" rowspan="1" valign="top">2.81</td> <td colspan="1" rowspan="1" valign="top">−2.85 (−4.10 to −1.60)</td> </tr> <tr> <td colspan="1" rowspan="1" scope="row" valign="top"> Mass merchandise stores</td> <td colspan="1" rowspan="1" valign="top">2.98</td> <td colspan="1" rowspan="1" valign="top">1.72</td> <td colspan="1" rowspan="1" valign="top">1.05</td> <td colspan="1" rowspan="1" valign="top">1.00</td> <td colspan="1" rowspan="1" valign="top">−1.20 (−2.04 to −0.36)</td> </tr> <tr> <td colspan="1" rowspan="1" scope="row" valign="top"> Pharmacies</td> <td colspan="1" rowspan="1" valign="top">0.16</td> <td colspan="1" rowspan="1" valign="top">0.13</td> <td colspan="1" rowspan="1" valign="top">0.14</td> <td colspan="1" rowspan="1" valign="top">0.13</td> <td colspan="1" rowspan="1" valign="top">−0.02 (−0.03 to −0.01)</td> </tr> </tbody> </table> </div> </div> </div> <p id="d748021e501">Total volume sales of taxed beverages in Philadelphia decreased by 1.3 billion ounces (from 2.475 billion to 1.214 billion) or by 51.0% after tax implementation. Volume sales in the Pennsylvania border zip codes, however, increased by 308.2 million ounces (from 713.1 million to 1.021 billion), offsetting the decrease in Philadelphia's volume sales by 24.4%. </p> </div><div class="section"> <a class="named-anchor" id="ab-joi190037-11">  </a> <h5 class="section-title" id="d748021e504">Conclusions and Relevance</h5> <p id="d748021e506">In Philadelphia in 2017, the implementation of a beverage excise tax on sugar-sweetened and artificially sweetened beverages was associated with significantly higher beverage prices and a significant and substantial decline in volume of taxed beverages sold. This decrease in taxed beverage sales volume was partially offset by increases in volume of sales in bordering areas. </p> </div>

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Changes in prices, sales, consumer spending, and beverage consumption one year after a tax on sugar-sweetened beverages in Berkeley, California, US: A before-and-after study

Lynn D. Silver, Shu Ng, Suzanne Ryan-Ibarra … (2017)

Background Taxes on sugar-sweetened beverages (SSBs) meant to improve health and raise revenue are being adopted, yet evaluation is scarce. This study examines the association of the first penny per ounce SSB excise tax in the United States, in Berkeley, California, with beverage prices, sales, store revenue/consumer spending, and usual beverage intake. Methods and findings Methods included comparison of pre-taxation (before 1 January 2015) and first-year post-taxation (1 March 2015–29 February 2016) measures of (1) beverage prices at 26 Berkeley stores; (2) point-of-sale scanner data on 15.5 million checkouts for beverage prices, sales, and store revenue for two supermarket chains covering three Berkeley and six control non-Berkeley large supermarkets in adjacent cities; and (3) a representative telephone survey (17.4% cooperation rate) of 957 adult Berkeley residents. Key hypotheses were that (1) the tax would be passed through to the prices of taxed beverages among the chain stores in which Berkeley implemented the tax in 2015; (2) sales of taxed beverages would decline, and sales of untaxed beverages would rise, in Berkeley stores more than in comparison non-Berkeley stores; (3) consumer spending per transaction (checkout episode) would not increase in Berkeley stores; and (4) self-reported consumption of taxed beverages would decline. Main outcomes and measures included changes in inflation-adjusted prices (cents/ounce), beverage sales (ounces), consumers’ spending measured as store revenue (inflation-adjusted dollars per transaction) in two large chains, and usual beverage intake (grams/day and kilocalories/day). Tax pass-through (changes in the price after imposition of the tax) for SSBs varied in degree and timing by store type and beverage type. Pass-through was complete in large chain supermarkets (+1.07¢/oz, p = 0.001) and small chain supermarkets and chain gas stations (1.31¢/oz, p = 0.004), partial in pharmacies (+0.45¢/oz, p = 0.03), and negative in independent corner stores and independent gas stations (−0.64¢/oz, p = 0.004). Sales-unweighted mean price change from scanner data was +0.67¢/oz (p = 0.00) (sales-weighted, +0.65¢/oz, p = 0.003), with +1.09¢/oz (p < 0.001) for sodas and energy drinks, but a lower change in other categories. Post-tax year 1 scanner data SSB sales (ounces/transaction) in Berkeley stores declined 9.6% (p < 0.001) compared to estimates if the tax were not in place, but rose 6.9% (p < 0.001) for non-Berkeley stores. Sales of untaxed beverages in Berkeley stores rose by 3.5% versus 0.5% (both p < 0.001) for non-Berkeley stores. Overall beverage sales also rose across stores. In Berkeley, sales of water rose by 15.6% (p < 0.001) (exceeding the decline in SSB sales in ounces); untaxed fruit, vegetable, and tea drinks, by 4.37% (p < 0.001); and plain milk, by 0.63% (p = 0.01). Scanner data mean store revenue/consumer spending (dollars per transaction) fell 18¢ less in Berkeley (−$0.36, p < 0.001) than in comparison stores (−$0.54, p < 0.001). Baseline and post-tax Berkeley SSB sales and usual dietary intake were markedly low compared to national levels (at baseline, National Health and Nutrition Examination Survey SSB intake nationally was 131 kcal/d and in Berkeley was 45 kcal/d). Reductions in self-reported mean daily SSB intake in grams (−19.8%, p = 0.49) and in mean per capita SSB caloric intake (−13.3%, p = 0.56) from baseline to post-tax were not statistically significant. Limitations of the study include inability to establish causal links due to observational design, and the absence of health outcomes. Analysis of consumption was limited by the small effect size in relation to high standard error and Berkeley’s low baseline consumption. Conclusions One year following implementation of the nation’s first large SSB tax, prices of SSBs increased in many, but not all, settings, SSB sales declined, and sales of untaxed beverages (especially water) and overall study beverages rose in Berkeley; overall consumer spending per transaction in the stores studied did not rise. Price increases for SSBs in two distinct data sources, their timing, and the patterns of change in taxed and untaxed beverage sales suggest that the observed changes may be attributable to the tax. Post-tax self-reported SSB intake did not change significantly compared to baseline. Significant declines in SSB sales, even in this relatively affluent community, accompanied by revenue used for prevention suggest promise for this policy. Evaluation of taxation in jurisdictions with more typical SSB consumption, with controls, is needed to assess broader dietary and potential health impacts.

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Higher Retail Prices of Sugar-Sweetened Beverages 3 Months After Implementation of an Excise Tax in Berkeley, California.

Jennifer Falbe, Nadia R. Rojas, Anna Grummon … (2015)

We assessed the short-term ability to increase retail prices of the first US 1-cent-per-ounce excise tax on the distribution of sugar-sweetened beverages (SSBs), which was implemented in March 2015 by Berkeley, California.