Sugar-Sweetened Beverage Taxes and Population Health Outcomes

In 2014, Mexico became the first country in the Americas to tax the sugar-sweetened beverage (SSB) industry, sparking a cascade of SSB excise taxes in the US¹ and globally.² Rigorous evaluations have demonstrated that Mexico’s SSB tax increased SSB prices and reduced purchasing³ and consumption.⁴ Evaluations in at least 5 US jurisdictions and 7 countries have also demonstrated that these taxes reduce SSB sales and purchases. Consequently, SSB taxes are expected to result in improvements in population health in the years that follow (e.g., lower incidence of conditions associated with SSB consumption, such as obesity and type 2 diabetes). However, data on the health impacts of SSB taxes are limited. One study of Mexico’s tax detected a lower probability of dental caries following tax implementation.⁵ This issue of JAMA Pediatrics includes an important addition to our understanding of tax health effects. The study by Gračner, Marquez-Padilla, and Hernandez-Cortes is the first to our knowledge to examine associations between an SSB tax and weight-related outcomes, finding lower risk of excess weight among adolescents, particularly for girls, in cities with larger price increases after the tax.

Mexico’s SSB tax and adolescent weight outcomes

Mexico’s 10% excise tax was levied on SSB manufacturers, but manufacturers and retailers passed these costs onto consumers, resulting in a 10% increase in the retail prices of SSBs on average. These price increases are one mechanism through which the tax could affect SSB purchases and ultimately health outcomes.

To examine the extent to which SSB price increases were associated with weight, the authors conducted a longitudinal ecological analysis, linking data on average soda prices in each of 39 cities from 2011–2016 to electronic medical records with annual height and weight measurements for >12,600 urban adolescents from 2012–2017.

The authors found a wide range of soda price changes across cities after tax implementation: −12% to >25%. However, in the majority of cities in the sample (n=23, 59%), soda prices increased by >10% (the amount of the tax). In these cities, but not in others with lesser price changes, tax implementation was associated with a significant decrease of almost 2% in the prevalence of adolescents at risk for overweight or obesity (eFigure 1).

Additionally, for each 10% increase in a city’s average price of soda, there was a 1.3 percentage point (or 3% relative) decrease in the prevalence of overweight and obesity among adolescent girls 2 years later. The decrease in overweight/obesity prevalence in boys was not statistically significant, consistent with prior research showing differences by sex in the effects of obesity prevention and SSB reduction interventions.^6,7

Although the observed reductions in excess weight were small, this study is one of the first to document a real-world improvement in a health indicator following an SSB excise tax, providing timely evidence to bolster the already strong case for SSB excise taxes.^2,8,9 Moreover, this study’s finding that larger soda price increases were associated with greater reductions in overweight and obesity suggests that raising Mexico’s SSB tax rate, as some have called for,¹⁰ would yield even larger health benefits.

A key strength of this study was the use of a large sample of objectively measured heights and weights of adolescents receiving healthcare from Mexico’s primary public provider, highlighting the potential value of electronic medical records for evaluating obesity prevention policies. Second, the data spanned 4 years after tax implementation, allowing for examination of lagged effects. Third, the authors leveraged variations in price changes of soda to examine associations of tax-induced price changes with weight, helping overcome the challenge of selecting a geographic control for a national-level policy. The authors also captured soda prices from a variety of store types (e.g., street stalls, grocery stores,) to better reflect prices in urban areas, where most taxed beverages are purchased from smaller stores.¹¹ Further, the results were consistent in robustness checks. Limitations include the use of city-level soda prices as a proxy for SSB prices individuals actually encountered, not weighting beverage prices by their sales volume, the potential for unmeasured confounding, and uncertainty about generalizability to other groups (e.g., younger children and adults, rural adolescents, and those with other or no healthcare coverage).

Comparison with modeling studies

This study’s estimated impact of soda price increases on weight outcomes is within the range of predictions from modeling studies based on Mexico’s 10% tax rate, though the use of different weight outcomes and ages complicates direct comparisons.¹² However, a consistent takeaway is that greater increases in SSB prices are associated with larger improvements in weight outcomes. A microsimulation study found that increasing Mexico’s tax rate to 20% would nearly double reductions in obesity (from 239,000 to 476,400 cases over 2 years) and diabetes (from 61,340 to 107,300 cases over 10 years)¹² Moreover, net health care cost savings would increase from $92 to $158 million.¹²

Challenges in detecting health outcomes

Several challenges complicate researchers’ efforts to detect and attribute changes in health outcomes to a single policy, especially when effects are modest. Identifying geographic controls can be challenging, if not impossible, when policies are enacted across an entire country. Disentangling tax effects from temporal trends is also difficult, as is measuring and adjusting for key confounders. Short-term responses to a tax could weaken early associations, for example if the SSB industry temporarily increases marketing or launches campaigns to repeal newly implemented taxes. Likewise, potential comparison communities might implement other SSB reduction strategies. These challenges are magnified when attempting to detect changes in outcomes that require more time to develop in response to SSB consumption than weight gain, like type 2 diabetes and heart disease. The likelihood of detecting SSB tax effects on health outcomes will be greatest when evaluating high tax rates in populations with high SSB consumption and when using outcomes that are responsive within a shorter timeframe (e.g., BMI, dental caries, HbA1c).

Beyond price mechanisms: Raising awareness and promoting community health

Raising SSB prices is just one way excise taxes can improve public health. Another path is by increasing awareness about the health harms of SSBs through pro-tax media campaigns, which often precede enactment of SSB taxes. In the lead up to Mexico’s SSB tax, a pro-tax multimedia strategy conveyed the high sugar content of SSBs and associated risks for type 2 diabetes, including through high-profile demonstrations in front of government buildings. A small number of studies conducted in other jurisdictions suggest that health-focused tax adoption campaigns can change behavior. Advocates in Berkeley, CA conducted a campaign highlighting the health harms of SSBs. One study found that sales of SSBs dropped on the UC Berkeley campus immediately after enactment of the tax but before it had been implemented, suggesting that the campaign changed behavior prior to price increases.¹³ Likewise, in South Africa, nationwide purchasing of sugar from SSBs fell by 26% after the announcement of but before implementation of an SSB tax,¹⁴ potentially in response to an intensive pro-tax communications campaign and media coverage. Additionally, government taxation of SSBs could signal to consumers that these beverages are harmful.

A third way SSB taxes can improve health is by allocating tax revenues to fund programs addressing community determinants of health. In Mexico, government officials stated the intention to use SSB tax revenues to expand clean drinking water access in schools, but the extent to which this occurred is unclear since the tax is not earmarked. In the US, tax revenues are supporting initiatives that directly address health conditions like diabetes or protective factors like access to healthy foods and efforts to reduce SSB consumption.¹⁵ Revenues also are invested in programs that address social determinants of health like early childhood education and human capital development.¹⁵

Designing a better tax

This study’s results, together with evidence from other jurisdictions, support setting a higher tax rate (20–40%) to produce more substantial improvements in health. Use of tax revenues to fund synergistic policies and programs like warning labels, healthy defaults, healthy food and beverage access, and SSB media campaigns is important,^1,16 as taxes alone cannot reverse the high prevalence of obesity and type 2 diabetes globally. In Mexico, earmarking tax revenues for drinking water, especially in schools, could amplify tax effects by providing a free, healthy substitute for SSBs.

Conclusion

This study adds to the growing evidence of SSB tax benefits. It is now well-documented that SSB taxes raise SSB prices and reduce SSB purchases. Importantly, this study is among the first to show that tax-induced price increases are associated with reductions in excess weight, especially for adolescent girls. Given the growing number of jurisdictions that have recently implemented SSB taxes, we anticipate more research examining taxes’ associations with health outcomes. Identifying these associations will be challenging, given the myriad factors that affect health and long time horizon for some outcomes to develop. Current evidence already demonstrates that SSB taxes are win-win policies that reduce purchases of unhealthy beverages and raise revenue that can be reinvested in communities impacted most by health and social inequities. Documenting health benefits will further strengthen the case for widespread SSB excise tax adoption.