Memorandum
A very notable study published last week in Health Affairs reports two-year success of Mexico’s soda tax, implemented on January 1, 2014. The one peso/liter excise tax on sugar-sweetened beverages reduced purchases by 5.5% in 2014 and an even greater 10.0% (rounding 9.7% up!) in 2015. In line with compelling previous findings, soda consumption decreased most dramatically in households of low socioeconomic status, which also happens to be the population most vulnerable to type 2 diabetes and obesity. Moreover, the study found a 2.1% increase in purchases of non-taxed beverages, which supports the hypothesis that people – once presented with the right economic incentives – will replace soda with water and other healthier alternatives.
Many studies have shown the cost-effectiveness of a sugar-sweetened beverage tax. In fact, this was a major theme at the National Academy of Medicine’s annual meeting, when Harvard’s Dr. Steven Gortmaker wowed the audience by showing how a soda tax would save $32 for every $1 invested – that’s a compelling ROI if we’ve ever seen one. The Health Affairs real-world outcomes data is even more reassuring that a sugar-sweetened beverage tax does change consumption habits, and that it could be a very effective way to lower incidence of type 2 diabetes and obesity. As prevalence of diabetes around the world continues to grow, confronting the epidemic will require population-level prevention efforts, including improvements to the food environment. In October, the World Health Organization (WHO) issued a call-to-action urging governments to issue a soda tax and curtail consumption of sugar-sweetened beverages – another endorsement that this excise tax really does work. We were so happy that our home city of San Francisco adopted the soda tax during the most recent election, along with Boulder, Albany, nearby Oakland, and Cook County (including Chicago); these cities joined Mexico, Berkeley, and Philadelphia. With these positive published results showing the efficacy of the soda tax, and with strong support from the WHO and diabetes/obesity thought leaders, we’re hopeful that many more cities will soon follow suit.
-- by Payal Marathe and Kelly Close