In an effort to reduce the consumption of sugary drinks, Seattle implemented a tax in 2018 on all beverages with added sugar. A recent study has shown that this tax may have had unintended consequences, as beer consumption increased by 7% in the city after the tax was implemented.
While it's unclear whether or not the increase in beer sales is directly related to the soda tax, it's clear that Seattle's attempt at getting its citizens to drink less sugary drinks has not been successful. This could be due to a number of factors, including people simply switching to other types of sugary drinks or buying their soda outside of Seattle.
Given their connection to negative health problems including type 2 diabetes, obesity and cardiovascular disease, taxes on sugar-sweetened beverages are increasingly used as a policy instrument to curb consumption.
However, the result of such a measure might be to push consumers towards alcoholic beverages unintentionally. The goal of this research was to evaluate the Seattle $0.0175 per ounce tax on sugar-sweetened beverages, which was implemented in January 2018.
One might expect that the results of the soda tax would be similar to those of taxation on alcohol. According to "Alcohol Taxation And Public Health," a working paper by University of South Carolina economist Michael L. Marlow, "persons reduce overall drinking in response to an increase in alcohol taxes, but substitute beer for hard liquor."
That study concluded that the tax on sugary drinks only reduced the consumption of sugary beverages by 1.6%. Instead of buying soda, consumers switched to other options including water and unsweetened tea.
This new study provides an interesting perspective for other cities and states that are considering implementing similar taxes. It will be particularly interesting to see if Seattle will re-evaluate their tax in the future.
This latest research was just completed in Jan 2022. Citation: Powell LM, Leider J (2022) Impact of the Seattle Sweetened Beverage Tax on substitution to alcoholic beverages. PLoS ONE 17(1): e0262578. https://doi.org/10.1371/journal.pone.0262578