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27 February 2019

Hurting sales: Here's how Berkley's soda tax significantly slashed sales over the years

A study shows that soda tax can influence what people buy and be effective in slashing sales, encouraging healthier drinking habits in many.

Sugary drink consumption has been slashed by more than half, three years after the city of Berkeley introduced a levy on these products.

Residents of Berkeley, a city in the United States (US), are drinking 52% fewer servings of sugary beverages than they did before a tax on these products was introduced in November 2014, according to a new study conducted by the University of California, Berkeley (UC Berkeley).

Increase in water consumption

“This just drives home the message that soda taxes work,” said UC Berkeley’s Professor Kristine Madsen.

Published this month in the American Journal of Public Health, the study found a corresponding increase in water consumption, which went up by 29%, over the same period.

The study “provides strong evidence that soda taxes are an effective tool for encouraging healthier drinking habits, with the potential to reduce sugar-linked diseases like diabetes, heart disease and tooth decay”, noted a UC Berkeley press release.

South Africa’s own version of a soda tax, called the Health Promotion Levy, will turn one-year-old in April and was similarly introduced to fight soaring rates of costly health conditions like obesity and diabetes.

According to the Healthy Living Alliance’s (Heala) Sbongile Nkosi, excessive consumption of sugary beverages is “a major cause of obesity” and “also increases the risk of diabetes, liver and kidney damage, heart disease and some cancers”.

“In 2017, there were around 180 000 new diabetes cases in South Africa’s public sector alone,” she said.

Behaviour in low-income communities

Nkosi also criticised the beverage industry which, she said, “have specifically targeted poor communities who have the least access to quality health services”.

Similarly concerned about the health impacts of sugary drinks in poorer settings, the Berkeley study focused on how the tax influenced behaviour in low-income communities, surveying 2 500 residents each year since the legislation came into effect.

“Importantly, our evidence comes from low-income and diverse neighbourhoods, which have the highest burden of diabetes and cardiovascular disease, not to mention a higher prevalence of advertising promoting unhealthy diets,” said Madsen.

Following Berkeley’s lead, a number of other US cities introduced similar taxes including Philadelphia, San Francisco and Seattle.

According to the World Health Organization (WHO), which officially recommends taxes on sugary drinks, this intervention has effective at fighting obesity and saves governments and health systems money with young people and those from low-income settings receiving the “greatest health benefit”.

Message about societal values

In his budget speech, Finance Minister Tito Mboweni announced that the local tax on sugary drinks would be increased slightly in order to account for inflation.

But Heala is pushing for the taxation rate to be increased, and effectively doubled, which would bring the country in line with WHO guidelines.

While the Berkeley researchers admit that “people are still very much affected by what hits their pocketbooks”, they suggest that “taxes also send a message about societal values, which can have a big impact on consumer behaviour”.

“We want to end this epidemic of diabetes and obesity, and taxes are a form of counter-messaging, to balance corporate advertising,” said Madsen.

And, according to Nkosi, a similar counter-narrative is needed in South Africa.

“We all know that many of our schools and spaza shops are covered with Coca-Cola adverts, and for decades many of us didn’t know the truth about how much sugar there is in cold drinks,” she said. “While Coca-Cola makes millions, the queues at our clinics grow longer.” – Health-e News

Image credit: iStock

 
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