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We look at how taxes on sugary soft drinks in the United States has affected consumption.

Zee Krstic
April 06, 2018

International and British manufacturers now have to pay an extra tax on high-sugar drinks that they sell in the United Kingdom—a move that has pushed many of the country's leading soda makers to actually cut back on the sugar they pack into their beverages.

According to the BBC, Fanta, as well as British soda makers Ribena and Lucozade, have already reduced sugar content in their drinks before the tax kicked into effect. Coca-Cola, however, has not.

Drinks containing more than 8g of sugar per 100ml will be taxed around .35 cents per liter—and drinks falling in between 5-8g sugar per 100ml will face a slightly lower rate of around .25 cents per liter produced. But it's up to manufacturers whether or not they'll pass the cost onto consumers.

Much of the initial media coverage in the country has been positive, and it's already caused some change. The British government says they're only expecting to tax 240 million pounds—nearly half of the original estimate of 500 million pounds—since brands have preemptively lowered sugar counts.

The UK is not the first to institute such a tax. Mexico, France, and Norway are among the countries leading the way with similar tax programs.

The BBC reports that Mexico's program, which began in 2014, saw a 12 percent reduction in consumption of soda compared to 2013. The largest reduction in sales were among the poorest households, and sales of alternative beverages—like bottled water—reportedly saw a small increase.

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In the United States, the first "soda tax" also passed into law in 2014 in Berkeley, California. According to Vox, there are eight different cities across the nation that are currently taxing consumers more if they buy sugary soft drinks: Berkeley, San Francisco, Oakland, and Albany, in California—as well as Boulder, Chicago, Seattle, and Philadelphia.

The idea of a health-focused tax hasn't always gone over well—a now infamous case is the battle that played out in New York City in 2010, where then Governor Patterson lobbied to add the tax to all sugary drinks of a certain size served across the city's five boroughs. And an attempt to ban sodas larger than 16oz, by then mayor Michael Bloomberg, was defeated in court in 2013.

However, more than 9 million Americans are now living under legislation that taxes soda in order to promote better health—and it's not clear whether the tax deters residents from soft drink consumption.

The Guardian shared the results of a report that studied Berkeley's soda tax which found that sales slumped upwards of 10 percent after just one year. Researchers were hopeful that the tax, which cost about around one penny per fluid ounce (adding 12 cents to a 12 ounce can usually sold at $1), deterred Berkeley shoppers from buying soda altogether.

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But the same report found a 7 percent sales increase in sodas in the surrounding areas of Berkeley—where the tax wasn't in effect.

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It's unclear if the United Kingdom's new nationwide tax will have the desired effect that many health-focused reformists hoped for, and many are waiting to see if they have to shell out more for their favorite brands. For now, we're hopeful that shoppers will simple switch to a more healthy drink, instead of, say, popping over to Scotland to pick up a 12-pack of Coke.