- Since Berkeley, CA, passed the first sugary drinks tax in the U.S., people have wondered whether the tax would work in discouraging consumers to buy these beverages. According to researchers at the University of California, Berkeley, the tax is raising prices.
- In the first three months following implementation of the tax, Berkeley's soda prices rose by seven-tenths of a cent per ounce, which means about 70% of the extra cost from the penny-per-ounce tax has been passed on to consumers. For sugary beverages overall, consumers are paying just under half of the tax on average.
- The intended effect of this type of excise tax is that consumers will see and feel the financial impact so that they would be less likely to buy the product being taxed.
Whether Berkeley's sugary beverages tax has had any effects on consumers' health is still not known for sure. After Mexico passed its own soda tax in 2014, purchases of sugary beverages in Mexico fell 6% on average that year, as compared with pretax sales.
Soda taxes, and excise taxes on foods and beverages, have long been discussed by health advocates and companies over their efficacy, and the food and beverage industries have fought hard against them. Between 2009 and 2014, the American Beverage Association spent $114 million to combat potential soda taxes, and other lawmakers have argued against soda taxes as well.