The Impact of Sugar Sweetened Beverage Taxes on Purchases and Dietary Intake

January 12, 2026 •

3 min read

Studies reveal that introducing a tax equivalent to a 10% increase on sugar-sweetened beverages (SSBs) has consistently led to an average decline in SSB purchases and dietary intake of 10.0%, according to a systematic review. This evidence demonstrates the effectiveness of such fiscal policies in influencing consumer behavior.

Quick Summary

This article examines the effects of sugar-sweetened beverage (SSB) taxes on consumer purchasing habits and overall dietary intake. The evidence points to a reduction in SSB consumption, and a potential increase in purchases of healthier alternatives, with notable public health benefits.

Key Points

Reduced Consumption: SSB taxes effectively reduce the purchase and consumption of sugary drinks, with a 10% tax often leading to a 10% decline in intake.
Behavioral Changes: Tax implementation causes significant shifts in consumer behavior, including purchasing fewer SSBs and opting for healthier, untaxed alternatives like water.
Health Outcomes: By lowering SSB consumption, these taxes can lead to improved public health outcomes, including reduced rates of obesity, type-2 diabetes, and dental caries.
Economic Effects: Independent studies contradict claims of job losses and negative economic impacts, finding potential for net positive effects and revenue generation for public health programs.
Tax Design Matters: The specific design of the tax, such as a tiered system based on sugar content, can influence manufacturer reformulation and achieve greater reductions in sugar intake.
Regressive Concerns: Although SSBs are more consumed by lower-income groups, the greatest health benefits also accrue to these populations, and revenues can be used to offset potential economic burdens.

The Mechanism of Sugar Sweetened Beverage Taxes

Sugar-sweetened beverage (SSB) taxes aim to reduce consumption through increased prices and awareness of health risks. Higher prices make sugary drinks less appealing financially, while non-price mechanisms, such as public health messaging, highlight their negative health effects. Research indicates that as prices rise, SSB purchases and consumption tend to fall.

How Tax Design Influences Impact

The effectiveness of an SSB tax can depend on its structure. Taxes can be volumetric (a flat rate per volume) or tiered based on sugar content. Tiered taxes, like the one in the UK, encourage manufacturers to reformulate products with less sugar to avoid higher taxes, contributing to a greater reduction in overall sugar intake. For example, in Portugal, reformulation linked to a tiered tax contributed to an 11% drop in energy intake from SSBs.

Documented Effects on Purchases and Consumption

Evidence from various locations shows that SSB taxes reduce purchases. After Mexico implemented a 10% tax in 2014, SSB sales decreased by an average of 6-8% in the first year, with the largest drops among lower-income households and families with children. A meta-analysis of real-world taxes found that a tax equivalent to a 10% price increase was linked to a 10% average decline in purchases and intake. In Berkeley, California, a soda tax resulted in residents drinking half as much soda after three years.

Changes in Dietary Intake and Substitutions

SSB taxes aim to improve dietary intake. Studies show that consumers often switch from taxed beverages to untaxed options.

Mexico: Plain water purchases increased by 4-6% after the SSB tax.
Philadelphia: A tax led to a 35% drop in taxed drink sales and a slower rate of weight gain.
Studies: A meta-analysis noted a small increase in consumption of untaxed drinks like water following an SSB tax.

Comparison of SSB Tax Outcomes Across Jurisdictions


Country/City	Tax Type	Key Outcome	Impact on Dietary Intake
Mexico	10% Volumetric	6-8% drop in SSB sales; higher impact on low-income families	Increase in plain water purchases
United Kingdom	Tiered (by sugar content)	Significant reformulation by manufacturers to avoid higher tax rates	11% reduction in energy from SSBs due to reformulation
Philadelphia	1.5 cents/ounce Volumetric	35% reduction in taxed drink sales	Slightly slower rate of weight gain
Berkeley	1 cent/ounce Volumetric	Residents drank half as much soda	29% increase in bottled water consumption
Chile	Tiered (by sugar content)	Price increase for high-sugar drinks, decrease for low-sugar	Encouraged shift to lower-sugar alternatives

The Broader Health and Economic Effects

Beyond purchase changes, SSB taxes are linked to better health outcomes, including potential reductions in type-2 diabetes and heart disease. A study projected a 20% SSB tax in Tanzania could reduce overall obesity by 6.6%. Contrary to some claims, independent studies, including those funded by the World Bank, suggest SSB taxes do not cause significant job losses. Any job shifts in the beverage sector are often balanced by gains elsewhere, and tax revenue can fund public health programs.

Potential Challenges and Considerations

Implementing SSB taxes can face opposition from the beverage industry and concerns about the tax disproportionately affecting lower-income groups. While lower-income households may spend more on SSBs, they also benefit most from reduced consumption and resulting health improvements. Potential regressive effects can be lessened by using tax revenues for public health initiatives or subsidizing healthier foods.

For more information on global SSB taxes, the UNICEF policy brief “Sugar-Sweetened Beverage Taxation” is a useful resource.(https://www.unicef.org/media/116681/file/Sugar-sweetened%20Beverage%20(SSB)%20Taxation.pdf)

Conclusion

Evidence strongly indicates that sugar-sweetened beverage taxes are an effective public health policy. By increasing prices and raising awareness of health risks, these taxes successfully reduce the purchase and consumption of sugary drinks. This often leads to consumers choosing untaxed alternatives like water. Despite challenges like industry opposition and concerns about fairness, well-designed taxes can address these issues and provide revenue for public health programs. The documented impact on dietary intake suggests significant long-term health benefits for the population.

Frequently Asked Questions

SSB taxes work primarily by increasing the retail price of sugary drinks, which reduces their affordability and makes healthier alternatives comparatively more attractive. They also use non-price mechanisms, such as signaling health risks, to influence consumption patterns.

Yes, real-world evaluations from around the world show that SSB taxes have been effective. A meta-analysis found a 10% tax was associated with a 10% average decline in purchases, and countries like Mexico and cities like Berkeley have reported significant reductions.

Evidence suggests that while some substitution occurs, many consumers switch to healthier, untaxed beverages, especially plain water. For example, Mexico saw an increase in water purchases, and Berkeley reported a rise in bottled water consumption.

Yes, tiered taxes that are based on sugar content (e.g., the UK's Soft Drinks Levy) provide a strong incentive for manufacturers to reformulate their products with less sugar to avoid higher tax rates. This can result in an overall reduction of sugar in the market.

While lower-income households may spend a larger proportion of their income on SSBs, making the tax seem regressive, research indicates these groups are also more price-sensitive and thus more likely to reduce consumption. This means they benefit most from the health improvements, and tax revenue can be used to fund programs that benefit low-income communities.

In many cases, revenue from SSB taxes is earmarked for public health and social programs, such as improving access to drinking water, funding nutrition education, or other community health initiatives. This helps to maximize the public health benefits of the tax.

Independent studies have consistently found no evidence of significant job losses in the beverage or manufacturing sectors due to SSB taxes. Any potential losses are often offset by job growth in other sectors as consumer spending shifts.