Do soda taxes work? Experts look to Mexico for answers

Should you have to pay an added tax for that soda? Voters in four American cities will face that question next week as they decide whether the sugary beverages sold in their neighborhoods should be taxed.

Initiatives to tax the sale of sodas and other sugar-sweetened beverages are on upcoming ballots in San Francisco, Oakland and Albany, California; and Boulder, Colorado.

As soda beverages have been associated with an increased risk of obesity, type 2 diabetes, heart disease and possibly heart failure, the idea behind these measures is to curb soda consumption in order to benefit public health.

A roughly 10% nationwide tax on sugar-sweetened beverages was introduced in Mexico in January 2014. Now, the policy is projected to result in an eye-popping drop in type 2 diabetes, stroke, heart attack and even death, according to a modeling study published in the journal PLOS Medicine on Tuesday.

“The tax has been criticized and under attack since it was approved,” said Dr. Simón Barquera, director of research policy and nutrition programs at the National Institute of Public Health of Mexico and a co-author of the study.

“A number of critics said the tax percentage amount was basically insufficient to provide any heath benefit to the population,” he said. “This study shows how important are the potential benefits, not only in reduction of cardiovascular health and diabetes mortality, but also in savings from heath expenditures if the soda tax is maintained or increased in the next 10 years.”

Mexico has among the highest rates of diabetes in the Americas, with 14% of Mexican adults having diabetes, according to the new study. In the United States, about 12% of adults live with diabetes.

Additionally, Mexico and the United States have among the highest rates of soda consumption in the world. In 2010, 31.5 gallons of soft drinks per person were consumed in Mexico, and 31.2 gallons per person were consumed in the United States, according to a 2013 study published in the American Journal of Public Health. More recent data has shown Americans have been drinking fewer sodas since then.

The new projections released this week reveal how soda taxes might benefit public health not only in Mexico but in other countries with high rates of soda consumption and diabetes, including the United States, said Dr. Kirsten Bibbins-Domingo, a professor of medicine, epidemiology and biostatistics at the University of California, San Francisco. She was lead author of the new study.

Surprising predictions for the future

The study researchers used the Cardiovascular Disease Policy Model, which has been involved in estimating health benefits in the United States since the 1980s, to simulate how Mexico’s sugar-sweetened beverage tax would affect adults ages 35 to 94.

The model was populated with data from the Mexican National Health Surveys, and from diverse national health system registries, to measure projected impacts from 2013 to 2022.

Separate studies have demonstrated that the Mexican soda tax has reduced purchases of sugary beverages, according to the researchers.

After the tax went into effect, purchases of taxed sugary beverages decreased by an average of 6%, compared with what expected purchases would have been with no tax, according to a study in the British Medical Journal in January.

That study also showed that the drop in purchases accelerated, declining up to 12% by December 2014. “It was the range of 6 to 12% that we used as the basis for modeling,” Bibbins-Domingo said.

So, based on the new model, the researchers projected that a 10% reduction in sugary beverage consumption among Mexican adults could result in about 189,300 fewer cases of type 2 diabetes.

That drop in cases is associated with an anticipated savings of almost $1 billion in health care expenditures, Bibbins-Domingo said. The researchers also projected 20,400 fewer incidents of strokes and heart attacks, and 18,900 fewer deaths.

“Probably the most surprising thing to us was that, while the benefits we found were across the entire adult population that we modeled, the benefits were greatest in the youngest age population,” Bibbins-Domingo said.

“In our model, the youngest age population is 35 to 44, and they were the ones with the largest number of diabetes cases prevented,” she said. “What that tells us is that the health benefits are likely to be even greater. When you prevent diabetes in a younger person, that person is leading many more years of life without a chronic disease.”

‘Only time will tell’

Derek Brown, an economist and assistant professor of public health at Washington University in St. Louis who was not involved in the new study, said he was also surprised to see the largest savings among younger adults.

“A limitation of the study is that it does not cover anyone below age 35. Sugar-sweetened beverage consumption rates are likely to be even higher among this group. They also do not include any indirect benefits, such as reduced absenteeism and greater productivity from a healthier work force,” Brown said.

“The most direct economic benefit of a sugar-sweetened beverage or soda tax is reduced health care expenditures. … Even a small decrease can be meaningful,” Brown said. “Economists also measure what we can in indirect benefits: forgone earnings, reduced quality of life and mortality. These things also have value.”

Overall, the new findings are important in terms of health care cost-savings, morbidity and mortality savings, and quality of life, said Dana Hunnes, a senior dietitian at Ronald Reagan UCLA Medical Center and an adjunct assistant professor at the University of California, Los Angeles Fielding School of Public Health.

However, “this study has its limitations in part because the further out into the future you project, the more uncertain the results. I think only time will tell whether the models they use adequately predict what will happen,” said Hunnes, who was not involved in the new study.

“If this is truly a long-term prospective study or experiment, then over time, they can track what is happening (with sugar-sweetened beverage consumption) and create new models based on their own findings. That would be really great,” she said. “In cultures that do not drink sugary beverages, rates of overweight and obesity are almost nil. In developing countries, such as Mexico, India and China, where sugar-sweetened beverages have only been introduced in the last few decades … rates of overweight and obesity quickly reached sky-high proportions.”

Soda industry fights back

However, the International Council of Beverages Associations noted in a statement that soft drink consumption in Mexico was reduced by only 11.6 milliliters (about two teaspoons) per person per day, according to the British Medical Journal study.

“The facts show that this tax has resulted in an insignificant calorie reduction per person per day in 2014, with no apparent health benefit,” the statement said.

“We do know through academic studies and from the marketplace that the tax reduced 10,000 jobs, caused a decline in Mexican GDP, and increased the tax burden on the poor; all without any evident improvement in public health. The beverage industry understands that (the) overweight and obesity issue is a very complicated one, and it will not be solved by a singular simplistic solution like a discriminatory tax,” the statement said. “In Mexico, our companies are working well with government and civil society on meaningful solutions, and we would hope the tax-only advocates would join this more meaningful approach.”

Since the tax in Mexico specifically targets sugar-sweetened beverages, Bibbins-Domingo argued that there are other ways in which small grocers and big industry alike would continue to make money and not lose jobs. When taxed, many soda consumers simply switch to healthier alternatives, such as bottled water, that are not taxed, she said.

“People still come in, and they purchase their groceries; they purchase their beverages. It’s just hopefully healthier types of beverages that they purchase,” Bibbins-Domingo said.

Additionally, some soda tax opponents argue that they unfairly target low-income and minority communities, so in other words, such taxes are regressive.

“I would say that these are often communities that are disproportionately burdened by diabetes itself,” Bibbins-Domingo countered.

“While taxes do have an impact on people who have limited budgets and limited incomes, unfortunately, those are communities that are also burdened by diabetes and suffer the cost and health consequences of having diabetes,” she said. “What we found in other work is that preventing diabetes can have a proportionately greater impact on improving health in poor and minority communities.”

A report that the World Health Organization released last month showed that taxing sugary drinks might be linked to reducing not only type 2 diabetes but also obesity and tooth decay.

WHO officials urged governments to consider fiscal policies to limit the consumption of sugar-sweetened beverages and their associated health impacts.

“There is a growing acceptance of taxes as an important public health tool to help combat the rise of diabetes, and that is part of the reason why the World Health Organization a few weeks ago issued their report,” Bibbins-Domingo said. “The World Health Organization report highlighted that diabetes rates have quadrupled around the world.

“The rising tide of diabetes is a worldwide problem.”

More city soda taxes

To combat diabetes in the United States, two cities have implemented taxes on sugary drinks.

In June, Philadelphia became the second city in the United States to approve a soda tax, which goes into effect January 1. The first city was Berkeley, California, which passed its soda tax in 2014.

After Berkeley’s tax passed, there was a 21% decrease in the consumption of sugar-sweetened beverages and a 63% increase in the consumption of water in the city’s low-income neighborhoods, according to a study published online in the American Journal of Public Health in September.

The study involved 990 residents in Berkeley, Oakland and San Francisco who were asked to complete a questionnaire about personal beverage consumption before the tax passed. Then, 1,689 residents completed the same questionnaire after the tax.

“Our study focused on low-income communities, and we saw a larger effect than models have predicted, which from a public health standpoint was a very promising result, but our numbers weren’t that different from those in Mexico among low-income households,” said Dr. Kristine Madsen, associate professor of joint medical program and public health nutrition at the University of California, Berkeley, and lead author of the study in the American Journal of Public Health.

Madsen added that the new PLOS Medicine modeling study, which included hard data on changes in sugar-sweetened beverage purchases in Mexico, takes a rigorous approach to predicting the long-term public health impact of soda taxes.

“The model suggests that Mexico will see a dramatic reduction in diabetes as a result of their soda tax,” she said. “We have an epidemic of diabetes in the United States just like Mexico, and the causes are similar. Therefore, I expect that the health implications of taxes in the US are likely to be similar as well.”