Taxing Soda Is The Best Way To Encourage Healthier Drinking

People don’t like sugary drinks enough to pay a lot for them.

Taxing Soda Is The Best Way To Encourage Healthier Drinking
[Image: Big Gulp via Flickr user Tess Shabaylo]

We know that sugar-rush drinks are bad for us. The links with obesity and obesity-related disease are well-established by now. But is raising the cost of these beverages with taxes the best way to respond? Do soda taxes work?


There’s been quite a bit of research into the question. One study from 2010, using survey data, found that a 20%-40% tax increase led to a small amount of weight-loss. Another studied the effect of a 35% price rise and education campaign in a hospital cafe. Sales fell by 26%. And, there are now real-life experiments to draw on, like the soda tax Hungary has had since 2011, and a more recent one in Mexico.

What makes a new Dutch study valuable is that it looks specifically at the effect of price increases in a controlled setting. It used a 3-D virtual supermarket allowing about 100 volunteers to “walk around” and choose from more than 500 items on the shelves. And therefore minimized other influences on shoppers that can skew research in real-world settings.

Half the sample shopped at the current tax rate for sugar-sweetened beverages (SSBs) in Holland (6%). Half shopped at a 19% rate–a 12% price difference. The increase cut sales by the equivalent of 0.9 liters (64 ounces) per household per week, or 13.5 ounces per person. And, the reduced soda sales didn’t lead to substitute buying of candy or chocolate, or alcohol, the study found.

“Our findings support other studies that also suggested that a soft drink tax would have positive effects,” says Wilma Waterlander, the lead researcher. “We can expect that any differences in purchases were due to the difference in soft drink prices.”

Soda taxes aren’t popular. Only about a fifth of Americans support them, according to a recent survey (portion control gets similar numbers). But they are straightforward, going right to the problem, and the products are easy to define from a law-making perspective.

Waterlander is in favor, though would also like to see action on other fronts, including agricultural subsides. “I think it makes sense to look at our wider food policy actions, for example agricultural subsidies that make that soft drinks and fast food so cheap,” she says.

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.