THE BLOG
11/06/2014 10:38 pm ET Updated Jan 06, 2015

The Soda Tax Experiment, Now Underway

Berkeley made history yesterday by becoming the first US city to successfully pass a soda tax. The 1-cent-per-ounce tax, which will cover caloric soda, sports drinks, energy drinks and sweet teas, will take effect Jan. 1 2015. The larger the bottle, the more noticeable the price increase will be. 

The combination of cash-strapped state budgets, the obesity epidemic, and the conclusive evidence tying sugary drinks to this epidemic and to bad health outcomes, brought about sugary drink tax initiatives in more than two dozen states, but up until now, all these attempts were fought off successfully by massive spending by the soda industry.

Is Berkeley's going to pave the way for other cities, as it did before with non-smoking sections in restaurants and curbside recycling?

Time, and I hope, a few careful studies will tell.

Price generally affects purchase decisions and there are many indications that soda sales are very price sensitive. It's expected that if a tax were high enough, sales of sugary beverages would decrease. Scholars theoretically debate to what extent taxes can affect obesity rates, with some studies concluding that even a modest one would improve public health by reducing obesity, while others contend that unless the tax is significant enough, behaviors won't change

Mexico began taxing soda in January this year. Preliminary findings showed a 10 percent decline in the taxed beverage's sales, and a 7 percent increase in the sales of non-taxes drinks (water, milk, 100-percent juice, diet soda). A survey in August found that the majority of Mexican participants said that they're drinking less soda, and that they relate sugary drinks with health problems such as diabetes and obesity.

The main argument used in fights against the tax is its regressive nature: A soda tax will affect low-income people more than it would impact higher income households as soda consumption is highest in lower socioeconomic homes and minority groups. On the other hand, low-income people stand to also benefit the most: The health problems caused by obesity fall disproportionately on the poor. The programs that these taxes will fund -- be it health insurance coverage, wellness programs, anti-obesity initiatives or subsidies for healthy foods -- will also benefit low-income people the most. 

The battles against taxing sugary drink elsewhere were successful in preventing them from becoming law, but by fighting the fight, the soda industry has been also drawing increasing attention to this important health issue. Tax it or not, people are ever more aware that sugary drinks are harmful, and they're already consuming less of them. 

The Berkeley sugary drinks law might be the experiment that provides the evidence that would justify similar measures in other cities. 

Dr. Ayala

Full disclosure: I'm vice president of product development for Herbal Water, where we make organic herb-infused waters that have zero calories and no sugar or artificial ingredients. I'm also a pediatrician and have been promoting good nutrition and healthy lifestyle for many years.