Taxing Sugar-Sweetened Beverages To Prevent ObesityMonday, January 22, 2018
In addition to the series of article on long-term outcomes in bariatric surgery, the 2018 special issue of JAMA on obesity, also features several articles discussing the potential role of taxing or otherwise regulating the use of sugar-sweetened beverages (SSB) as a policy measure to address obesity.
In a first article, Jennifer Pomeranz and colleagues discuss whether or not governments can in fact require health warnings on advertisements for sugar-sweetend beverages. The discussion focuses on an injunction issued by the Ninth Circuit Court on the enforcement of San Francisco’s requirement that sugar-sweetened beverage (SSB) advertisements display a health warning statement, finding that this law likely violated the First Amendment rights of advertisers of SSBs.
The background for this court decision was the fact that San Francisco passed a law requiring SSB advertisers to display: “WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.”
In its decision, the court felt that the proposed warning label was not scientifically accurate, as it focussed exclusively on “added sugar(s)” rather than sugars overall. It appears that there is no scientific evidence suggesting that “added sugars” are any more (or less) harmful than the “natural” sugar occurring in any other foods or beverages).
However, as the authors argue, warning on SSB may well be warranted as
“In addition to being a major source of added sugar in the US diet, the liquid form of SSBs could enable rapid consumption and digestion without the same satiety cues as solid foods. SSBs also contain no relevant ingredients to provide offsetting health benefits, in comparison with sweetened whole grain cereals, nut bars, yogurt, or other foods with added sugars, which can have healthful components. Furthermore, the associations of SSBs with weight gain, obesity, type 2 diabetes, and heart disease are each stronger and more consistent than for added sugars in solid foods. In addition, compared with other foods containing added sugars, SSBs are the only source for which randomized controlled trials have confirmed the observational link to weight gain.”
Another point of contention identified by the court was related to the fact that the warning stated harm irrespective of quantity and would have been more accurate had it included the term “overconsumption” or at leas the qualifier “may”.
Here, the authors argue that,
“health risks of SSBs increase monotonically. Thus, use of the word “overconsumption” would not be scientifically accurate because there is no clear threshold effect between SSB consumption and harm. Yet, due to potential individual variation in responses, incorporating the word “may” or “can” would be scientifically accurate and are used in alcohol and smokeless tobacco warnings.”
The third objection by the court was related to the proposed size and rectangular border requirements of the warning, which was considered to be “unduly burdensome” – a point that the authors concede could be dealt with by modify formatting requirements by slightly reducing size, permitting “hairline” borders, or using other methods to ensure prominence and conspicuousness.
.In a second article on the issue of SSBs, Lisa Powell and Matthew Maciejewski discuss the case for taxing SSBs, noting they are the largest contributor of added sugar in the US diet, accounting for approximately 6.5% of total daily calories among adults and 7.3% among youth (ages 2-19 years) and approached 8% to 9% of daily calories among minority populations and 9% to 10% among low-income households. In addition consumption of SSBs have been associated with obesity as well as type 2 diabetes, cardiovascular disease, dental caries, and osteoporosis.
As the authors point out, for SSB taxes to be effective, the increased cost of SSBs has to be passed on to the consumer (“pass-through) and the consumer has to respond by decreasing their consumption (“price elasticity”). In places where SSB taxes have been implemented (e.g. Mexico), both effects have been seen, suggesting that an SSB tax can indeed change consumer behaviours.
However, as the authors also note, so far there is little evidence directly demonstrating that such changes have translated into actual health outcomes (for obesity or otherwise).
Nevertheless, the authors feel that an SSB tax can effectively decrease the overall consumption of these beverages and should perhaps be extended even further to include all forms of sugary drinks including 100% fruit juice. For this approach to be broadly acceptable, it would also be important to dedicate any revenue from these taxes to specific educational or public health purposes.
Finally, a third article on this issue by John Cawley deals with an interesting “quasi experimental” pass-through effect of SSB taxes at the Philadelphia International Airport, which happens to straddle the city border, with some terminals in Philadelphia that are subject to the beverage tax (1.5 cents per ounce), and other terminals in Tinicum that are not.
The study included 31 stores: 21 on the taxed side of the airport (Philadelphia) and 10 on the untaxed side (Tinicum).
As the authors found, following the implementation of the SSB tax in Philadelphia, the average price of SSBs increased on both the taxed and untaxed side of the airport (albeit more so on the taxed side). Using only data for taxed stores, the percentage of the tax passed on to consumers was 93%. Overall, however, the price difference between the taxed and untaxed stores was about 0.83 cents per ounce (a 55% relative pass-through rate).
Thus, while the tax did have a significant effect on SSB pricing in Philadelphia, it appears that the non-taxed stores simply went along to increase their profit margins accordingly.
Whether or not these changes in pricing had any impact on actual SSB sales or consumption was not reported.
Together, these studies certainly support the statement by Powell and Maciejewski that
“SSB taxes are likely to remain controversial for some time and policy makers will have a number of issues to consider as they formulate and implement fiscal policies.”
“SSB taxation can only be one approach to what must be a multipronged public health strategy to reduce obesity via improved diets and increased activity. The fact that intake of SSBs has declined over the past decade and the obesity epidemic has continued unabated suggests that reducing SSBs alone is not the sole solution. Adults and youth who frequently consume SSBs are more likely to engage in other unhealthy behaviors (eg, inactivity, greater fast-food consumption), so population-based policies specifically targeting these behaviors need to be designed in concert with SSB taxes. Although SSB consumption remains high in the United States, particularly among vulnerable populations, and taxation is a viable tool for curbing its consumption, the long-run intended and unintended effects of SSB tax policy are yet to be determined. The debate on its merits as an effective tool to improve health outcomes will be greatly informed by rigorous evidence on consumption, sugar intake, and body weight both on average and within vulnerable populations (children, minorities, low-income individuals).”