A tax on sugar-sweetened and artificially sweetened beverages implemented in Philadelphia, Pennsylvania, was associated with increased prices and decreased volume sales of taxed beverages, according to study results published in JAMA.
The investigators of this study sought to evaluate the effect of Philadelphia’s beverage excise tax on the prices and sales of sugar-sweetened and artificially sweetened beverages and to assess the potential of cross-border shopping in nearby zip codes to avoid the tax.
The investigators used a difference-in-differences approach to analyze sales data and to compare changes in taxed beverage prices and sales volume by store type, beverage sweetener status, and beverage size before and after the tax was implemented on January 1, 2017. Investigators analyzed sales data from 291 stores (54 supermarkets, 20 mass merchandisers, and 217 pharmacies) in Philadelphia and zip codes bordering Philadelphia, and in Baltimore, Maryland as the control city. These data represent approximately one-quarter of the ounces of all taxed beverages sold in Philadelphia.
After the implementation of the beverage excise tax, the mean price per ounce of taxed beverages increased at all stores (from 5.43 cents to 6.24 cents in Philadelphia, and from 5.33 cents to 5.5 cents in Baltimore) whereas the volume of taxed beverage sales per month decreased across all store types. During the after-tax period, Philadelphia had significantly greater increases in taxed beverage prices compared with Baltimore (difference-in-differences, 0.65 cents; 95% CI, 0.6-0.69 cents; P <.001) and a significantly larger reduction in taxed beverage volume sold. The volume sales of taxed beverages in Philadelphia decreased by 1.261 billion oz (51%) following tax implementation; volume sales in Baltimore decreased by 13.3 million oz. In bordering zip codes, however, the volume sales increased by 308.2 million oz, which offset Philadelphia’s volume sales by 24.4%, for an overall reduction of 38%.
Limitations to the study are that it included only data from chain retailers, reflected about 25% of all taxed beverage ounces sold in Philadelphia, and lacked data from New Jersey, where potential cross-border shopping may have occurred. The data did not reflect the overall store revenue. Finally, the study did not report associated changes in beverage consumption and health outcomes.
The investigators indicated that a significant increase in beverage prices and a substantial decrease in volume sales were associated with Philadelphia’s beverage excise tax imposed on sugar-sweetened and artificially sweetened beverages beginning in 2017; however, the decline in sales volume was partially offset by cross-border shopping in neighboring areas.
The study was sponsored by Bloomberg Philanthropies.
Roberto CA, Lawman HG, LeVasseur MT, et al. 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. JAMA. 2019;321:1799-1810.
This article originally appeared on Medical Bag