Can we be persuaded by our pocketbook? Years ago, I noted the New York plan to prevent obesity by regulating soda. See Can I Get a Team Gulp (July 2014). New York was not alone, the idea of financial disincentive spread. See Soda Taxes (December 2016). There is no doubt that America is in the throes of a variety of challenges. Among our current pandemics is obesity and the thought behind these efforts is to make it more expensive to be fat. See What's in a Name (August 2020); Comorbidity of Obesity (October 2021).
There are critics of the taxation route. The Washinton Post ran an opposing viewpoint in 2019 that asserted such taxes are both ineffective and disproportionate in their impacts. But CNN reports that raising prices of "drinks by an average of 31% reduced consumer purchases of those drinks by a third." Some will perceive symmetry there. If raising the price 30% reduced consumption by 30%, perhaps raising the price 100% would eliminate consumption the same? Doubtful. Despite that, the CNN story quotes one analyst's "1% equals 1%" conclusions.
More broadly, some might also question whether the current pace of inflation is affecting consumer habits in a more general sense. Is it possible that we consume less of such products as the price rises through increased production, transportation, and other costs generally? Might that have a disparate impact in the area of convenience consumption (the soda at the gas station?), or discretionary spending generally? Apologies for the singular "soda" reference, a "pop" or a "soft drink" for the rest of you.
The CNN story also references the thoughts of some in the beverage industry. They see less persuasiveness in the regulation and taxation. One notes that there is an increased variety of competing products. I have noticed a proliferation of "Zero Sugar" soda in my retail shopping. It is comforting to a perennial dieter like me that I no longer have to consume "Diet" soda and can now choose "Zero" instead. That subtle distinction aside, the beverage folks say that 60% of the pop we consume now is sugarless.
As an aside, how much less sugar soda would be consumed if restaurants offered more alternatives? Next time you eat out, even if you do not wish for an alternative, ask the wait staff what their alternatives are. Many restaurants offer a variety of soda, but only one "Diet" or "Zero" cola. Try to find a no-calorie lemon-lime in a restaurant that lacks a fancy "all alternative" machine. In most, that single diet cola or "unsweet tea" or water are the only balance against a raft of sugary alternatives. Why?
Did the sugar taxes diminish the consumption through consumer detriment (price) or did it increase alternative consumption through producer detriment? Producers faced with the prospect of sales diminishing because of the economic reality of higher prices were perhaps encouraged to place competing products into the equation. Those products, marketed alongside the more expensive sugar alternatives perhaps contribute to the consumer choice? In the restaurant setting, is the customer charged differently for a diet or sugar soda? A review of online menus leaves some doubt.
Is it the taxes? Many thought that when the taxes on cigarettes increased (currently $1.01 federal and $1.34 in Florida, plus the 6+% sales tax) consumption would stop. But many a convenience store still has a "cigarette wall" behind the register. Someone is still buying these products. Nonetheless, it appears cigarette use is at historic lows. But, some might point to the "alternative" there and vaping. There is some measure of decrease in that market also, but is some cigarette success due to the vaping alternative?
Furthermore, is the soda benefit clear? The CNN article notes that there are potential dangers in the consumption of either soda with sugar or without. The authors point to the potential for "chronic disease" and "risk of dying early." The conclusion, nonetheless, is that reduced sugar intake is positive in terms of decreasing healthcare costs. But what will be the next concern when the sugar is gone and the focus is changed?
The analysis may be complicated by the patchwork of regulation. Every state taxes tobacco, though at varying rates. However, CNN notes that "Nine US jurisdictions . . . have implemented some form of consumer tax on sugar-sweetened beverages." NPR suggests that the study referenced above (the 33% reduction) is focused on "five U.S. cities after they implemented taxes targeting those drinks." The sugar tax, therefore, is not widespread. Conversely, the statistic that 60% of consumption is now non-sugar is widespread. Perhaps there is more at work across the country than taxes?
The point of all of this is that the determination of cause and effect can be challenging. Though there may be a demonstrable impact of any action, whether a regulation or a tax, there may be the potential for alternatives. The workers' compensation community saw this in the 1990s when various doctors began proclaiming the benefits and harmlessness of safe and efficacious opioids. That alternative consumption turned into a pandemic of its own, and thirty years later we are still working through the human and financial costs.
Do taxes and regulations impact consumption? In all likelihood they do. Is that impact significant? That is a harder question. The regulation of sugar drinks in a handful of jurisdictions or municipalities is not driving the consumption of zero-sugar to 60% overall. The incredible inflation of the post-COVID world is driving consumption decisions. The availability of an increasing variety of alternatives is driving consumption decisions.
As with vaping, the questions will persist. Is the alternative better? Are zero sugar "healthy" or merely "less unhealthy?" When regulation and taxation are engaged to change consumer behavior, is the result improved health in the broadest sense? Or, will the change merely lead to a future campaign against the alternative?
