Philadelphia Tax on Sweetened Drinks Led to Drop in Sales

PHILADELPHIA — Philadelphia’s tax on sweetened beverages led to a 38.9 percent drop in the volume of taxed beverages sold at small, independent retailers and a significant increase in the price of taxed beverages, according to new research from the Perelman School of Medicine at the University of Pennsylvania.

This study builds on previous research that suggests beverage taxes can help reduce purchases of sugary drinks, led by Christina Roberto, PhD, an associate professor of Medical Ethics and Health Policy at Penn, and senior author on this latest paper published in Health Affairs.

“Beverage taxes are a win-win: they decrease purchases of sugary drinks that are making us sick, and in Philadelphia, also raise revenue for important programs supporting children’s education,” Roberto said.

In January 2017, Philadelphia implemented an excise tax of 1.5 cents per ounce on sugar- and artificially sweetened beverages, to raise revenue for education initiatives. This is the first study to examine the impact of the tax on volume sales at small stores.

Researchers report that a year after Philadelphia’s tax on sweetened beverages went into effect, the price of taxed drinks in the small independent stores they studied increased by 1.81 cents per ounce and the volume of taxed beverages sold had dropped 38.9 percent.

The research team found larger declines in taxed beverage purchases at stores in neighborhoods where there are higher rates of chronic diseases like type 2 diabetes. These data indicate that sweetened beverage taxes are an effective policy tool for reducing sugary drink purchases among at-risk populations.

Roberto and the rest of the research team conducted the study to examine sugary beverage purchases in 134 small independent stores in urban areas. They compared changes in beverage prices and purchases before and twelve months after tax implementation at small independent stores in Philadelphia and an untaxed control city, Baltimore, Maryland.

“This study provides important additional evidence that beverage taxes are one of the most effective policy tools we have to decrease sugar-sweetened beverage purchases,” Roberto said.

This study was supported by Bloomberg Philanthropies. Additional Penn authors include Laura Gibson, PhD, an assistant research professor of Medical Ethics and Health Policy, Jiali Yan, MS, a data analyst of Medical Ethics and Health Policy, and Nandita Mitra, PhD, a professor of Epidemiology and Biostatistics, as well as researchers from Harvard University’s T.H. Chan School of Public Health, Drexel University, Johns Hopkins University Bloomberg School of Public Health, and the Philadelphia Department of Health.