Three Years After Soda Tax, Sugary Drink Consumption Falls Drastically in Berkeley

Taxing sugary drinks can help in the fight against obesity, heart diseases, and diabetes, shows new study. But Big Soda continues to oppose local efforts to imposes such taxes.

Remember how Big Soda spent $2.3 million during the 2014 elections in a desperate attempt to kill the City of Berkeley’s proposal to levy a modest tax on sugary drinks? The industry clearly understood the measure could be precedent-setting and the stakes were high for its bottom line. But residents of the progressive California city understood the stakes were high as well, especially when it came to their health. The measure passed by a resounding 75 percent vote, making Berkeley the first ever city in the United States to tax sweet sodas.

photo of sodas
Residents in Berkeley's low-income neighborhoods are drinking significantly less soda than they did before the city enacted a tax on sugary drinks. Photo by Rusty Clark.

As Big Soda feared, the tax has had a huge impact. A new study by University of California, Berkeley researchers shows that within months of the tax going into effect in 2015, consumption of sugary drinks in the city’s diverse and low-income neighborhoods fell dramatically, by about 21 percent. And today, three years later, residents in these neighborhoods are drinking 52 percent fewer servings of sugary drinks than they did before the tax was passed. The study was published yesterday in the American Journal of Public Health.

“We were initially surprised that the drop was so drastic, but a similar study in Philadelphia [which passed a soda tax early last year] saw a 26 percent drop in sugary drinks consumption in the first two months,” says study coauthor Kristine Madsen, who is the faculty director of the Berkeley Food Institute in UC Berkeley's School of Public Health. “This shows that just passing a tax can make a difference,” she says “When you see that the majority of the constituents in your neighborhood view something as not healthy, it sends a message … it educates people in a sense.”

Madsen notes that it is especially significant that evidence regarding the efficacy of the Berkeley tax comes from neighborhoods in the city that have “the highest burden of diabetes and cardiovascular disease, not to mention a higher prevalence of advertising promoting unhealthy diets.”

The study comes at a critical time for towns and cities considering soda taxes. While a number of cities, including Boulder and Seattle, now have soda taxes on the books, both California and Washington state passed bills in 2018 that ban municipalities from putting future soda taxes in place. Michigan and Arizona too, passed preemption bills in 2017 and 2018, and similar policies are cropping up across the country.

As Journal columnist Anna Lappé wrote last year: “While none of these bills mention sugary drink taxes by name, they simply ban all local food and beverage taxes, or effectively prohibit them by requiring that all taxes on food products must be ‘uniform.’ In other words, taxes cannot target unhealthy products to the exclusion of others, making them impractical.” Lappé points out that the industry tries to pass off these bills as pro-consumer choice policies.

Prior to the Berkeley vote, 31 other cities, including the neighboring cities of Richmond and San Francisco, had tried to pass similar taxes. These efforts were defeated by expensive anti-tax campaigns supported by the American Beverage Association, which represents producers and bottlers of soft drinks, bottled water, and other non-alcoholic beverages. (Oakland and San Francisco have since enacted their own soda taxes, which went into effect in mid-2017 and 2018, respectively.)

The new study, the first to document the long-term impacts of a soda tax on drinking habits in the US, 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.

photo of berkeley research team
To learn about the city's drinking habits, a UC Berkeley research team polled residents at high-traffic intersections in diverse and low-income neighborhoods in Berkeley, Oakland, and San Francisco. Photo by Kristine Madsen/ UC Berkeley.

To find out about residents' drinking habits, the researchers have been tracking the drinking habits of around 2,500 people each year in high foot traffic intersections in racially and demographically diverse neighborhoods across Berkeley, Oakland, and San Francisco since 2014.

The so-called “street intercept surveys” revealed a steep drop in sugar-sweetened beverage consumption in Berkeley between 2014 and 2017. The decrease was seen overall for sugary drinks, and specifically for soft drinks like Coke and Pepsi, sports drinks like Gatorade and Powerade, and sweetened teas and coffees. Water consumption also saw a bump, going up 29 percent over the three-year period.

Residents of neighboring Oakland and San Francisco drank about the same number of sugary beverages in 2017 as they did in 2014, suggesting that these changes were unique to Berkeley and not signs of a regional trend in drinking habits unrelated to the tax, the study notes.

However, Madsen cautions that the study has some limitations: Street intercept surveys do not provide a random sample of residents, and Berkeley is a relatively small and highly-educated city. But then again, she notes that the similarity between these results and the result of another long-term study in Mexico, which also saw increased effects of a soda tax over time, suggest that measures like soda taxes can be a powerful tool in the fight to improve public health.

An earlier, 2012 study led by researchers from University of California, San Francisco found that a nationwide tax of one cent per ounce of soda could prevent 240,000 cases of diabetes per year and save 26,000 lives over a decade.

Most of the revenue generated from the soda tax — levied at the rate of one cent per fluid ounce of sugar-sweetened beverages — is dedicated to supporting nutrition education and gardening programs in schools and to local organizations working to encourage healthier behaviors in the community. While the excise tax is levied on distributors, rather than directly on consumers, subsequent studies have shown that retailers incorporated the higher costs into the shelf price of the drinks. “There are some earlier studies out of Berkeley that suggest that the messaging alone is effective at reducing consumption,” Madsen says. “But people are still very much affected by what hits their pocketbooks.”

She also points out that the soda industry, while fighting the taxing efforts, is also thinking ahead about the next big threats to its bottom line. Anticipating a decline in sweet drinks sales, it’s already pushing consumers towards fizzy and other kinds of bottled water. And, alarmed at the rising public concern about plastic pollution, especially from disposable plastics like soda and water bottles, the industry is trying to preempt local government efforts to tax packaging. For instance, the California bill banning all new local soda taxes until 2031 that was passed last year also banned local taxes or fees on food packaging, wrapping, and containers. (The good news is, new bills seeking to overturn the 2018 ban on soda taxes and impose an additional tax on “Big Gulp”-style sodas, were introduced in California on Wednesday.)

“In terms of a country’s ability to put its people’s health first we are far behind other nations,” Madsen says. “We have countries like the United Kingdom and Ireland that have national soda taxes on sugar-sweetened beverages, and Mexico, which has taxes on added sugars in food, too. But as a nation, we don’t seem to have the courage to stand up and say [sugary drinks] are not in our interest … It’s just painful, when you really start to look at it.”

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