Should We Worry About Spillover Effects of Sugar Sweetened Beverage Taxation Policies? Comment on “Understanding Marketing Responses to a Tax on Sugary Drinks: A Qualitative Interview Study in the United Kingdom, 2019”

Abstract

Taxes on sugar sweetened beverages (SSBs) have been widely implemented and heralded as a panacea in reversing the growing burden of non-communicable diseases (NCDs). Using a qualitative research methodology, Forde et al explored how sugary drink companies respond to changes in taxation positing that relative effectiveness of sugar taxes will not only depend on how prices are affected, and how consumers respond, but also how producers respond by reformulating their products or engaging in counteractive marketing strategies. They argue that these responses may undermine the public health goal. We discuss some of the key issues that arise in their paper and conclude that company responses may not be sufficient in undermining the public health goal, and that consumption of sugary drinks fall after imposition of taxes, though demand is inelastic. We argue that inelasticity of demand for SSB may require a combination of interventions to sufficiently reduce excess consumption of sugar drinks.

Keywords: Sugar-Sweetened Beverage Tax, Non-communicable Diseases, Economics of Taxation