Association of a Sweetened Beverage Tax With Purchases of Beverages and High-Sugar Foods at Independent Stores in Philadelphia
Question How has the 2017 Philadelphia beverage tax factored into longer-term changes in beverage prices and purchases in independent food retail stores based on observational data?
Findings This cross-sectional study found that, 2 years after tax implementation, price audits of stores showed 137% of the tax was passed through to prices and bag checks indicated a 42% decline in volume of taxed beverages purchased in Philadelphia compared with Baltimore. Total calories purchased from beverages and high-sugar foods declined, suggesting food substitution did not offset beverage declines.
Meaning These findings suggest a city-level beverage excise tax was associated with persistent declines in purchases of sweetened drinks and calories from sugar in independent stores.
Importance The relationship between a sweetened beverage tax and changes in the prices and purchases of beverages and high-sugar food is understudied in the long term and in small independent food retail stores where sugar-sweetened beverages are among the most commonly purchased items.
Objective To examine whether a 1.5 cent-per-fluid-ounce excise tax on sugar- and artificially sweetened beverages Philadelphia, Pennsylvania, was associated with sustained changes in beverage prices and purchases, as well as calories purchased from beverages and high-sugar foods, over 2 years at small independent stores.
Design, Setting, and Participants This cross-sectional study used a difference-in-differences approach to compare changes in beverage prices and purchases of beverages and high-sugar foods (candy, sweet snacks) at independent stores in Philadelphia and Baltimore, Maryland (a nontaxed control) before and 2 years after tax implementation, which occurred on January 1, 2017. Price comparisons were also made to independent stores in Philadelphia’s neighboring counties.
Main Outcomes and Measures Changes in mean price (measured in cents per fluid ounce) of taxed and nontaxed beverages, mean fluid ounces purchased of taxed and nontaxed beverages, and mean total calories purchased from beverages and high-sugar foods.
Results Compared with Baltimore independent stores, taxed beverage prices in Philadelphia increased 2.06 cents per fluid ounce (95% CI, 1.75 to 2.38 cents per fluid ounce; P < .001), with 137% of the tax passed through to prices 2 years after tax implementation, while nontaxed beverage prices had no statistically significant change. A total of 116 independent stores and 4738 customer purchases (1950 [41.2%] women; 4351 [91.8%] age 18 years or older; 1006 [21.2%] White customers, 3185 [67.2%] Black customers) at independent stores were assessed for price and purchase comparisons. Purchases of taxed beverages declined by 6.1 fl oz (95% CI, −9.9 to −2.4 fl oz; P < .001), corresponding to a 42% decline in Philadelphia compared with Baltimore; there were no significant changes in purchases of nontaxed beverages. Although there was no significant moderation by neighborhood income or customer education level, exploratory stratified analyses revealed that declines in taxed beverage purchases were larger among customers shopping in low-income neighborhoods (−7.1 fl oz; 95% CI, −13.0 to −1.1 fl oz; P = .001) and individuals with lower education levels (−6.9 fl oz; 95% CI, −12.5 to −1.3 fl oz; P = .001).
Conclusions and Relevance This cross-sectional study found that a tax on sweetened beverages was associated with increases in price and decreases in purchasing. Beverage excise taxes may be an effective policy to sustainably decrease purchases of sweetened drinks and calories from sugar in independent stores, with large reductions in lower-income areas and among customers with lower levels of education.
Beverage taxes are a promising policy to reduce sugar-sweetened beverage (SSB) consumption. SSBs are more commonly consumed by communities of color and low-income populations,1-3 and excess consumption is associated with poor health outcomes.4-7 As of 2020, beverage taxes—ranging from 1 to 2 cents per fluid ounce—were implemented in 7 US localities. A tax in Philadelphia, Pennsylvania, enacted January 1, 2017, was for 1.5 cents per fluid ounce.
Mounting research suggests that beverage taxes are consistently associated with increased prices,8-20 and reductions in the volume of taxed beverages sold13-15,19-24 with considerable variation by retailer type and tax jurisdiction. There is some evidence that beverage taxes are associated with reductions in self-reported consumptions of SSBs, although results are mixed and many studies are limited by small sample sizes.22,24-27 One year after Philadelphia’s 1.5-cent-per-fluid-ounce tax on sugar- and artificially sweetened beverages, we found that small, independent stores passed-through 120% of the tax to prices and the fluid ounces of taxed beverages per purchase declined by 39%.14 Tax effects at small, independent stores have been understudied, despite SSBs being among the most commonly purchased items at these stores28-30 and the many shopping trips made to these stores in urban and low-income areas.28 Small business owners are also key stakeholders in beverage tax policy discussions, underscoring the importance of understanding small store sales in response to a tax. There are also limited data on whether initial reductions in sweetened beverage sales in response to these taxes persist beyond the first year. Mexico’s countrywide tax was associated with persistent reductions in taxed beverage sales 2 years later,23 but US city tax effects might lessen over time given the ability to cross city lines to avoid the tax. In addition, although 1 published study has found no evidence of substitution to high-calorie foods or alcohol in place of SSBs 1 year after Philadelphia’s tax,31 no studies have examined potential substitution over the longer term (ie, ≥2 years).
This study fills these gaps by evaluating the association between implementation of the Philadelphia tax and changes in beverage prices and fluid ounces purchased, as well as total calories purchased from beverages and high-sugar foods, 2 years posttax in a large sample of small, independent stores. We hypothesized the tax would be associated with significant beverage price increases and reductions in taxed beverage sales, with limited substitution to high-sugar foods. Our secondary aims examined differences by beverage sweetener status and container size as well as neighborhood income in neighborhoods where stores are located and customer education level.
In this cross-sectional study, we used a difference-in-differences approach to examine pretax vs posttax beverage prices, fluid ounces purchased, and total calories purchased from beverages and high-sugar foods at small independent food retailers in Philadelphia compared with Baltimore, Maryland. Baltimore was the control city because it is geographically close to Philadelphia but does not border it and has a similar demographic composition.32 In prior work, we observed parallel trends in beverage volume sales among large, chain retailers in 2016 and therefore assumed it was similar for independent stores.15
Stores were included if they sold at least 3 of 31 beverages assessed on store audit forms (methods and forms published elsewhere14). Trained research assistants collected data on beverage prices and customer purchases at baseline (October-December 2016) right before the January 1, 2017, tax implementation date; 6 months after tax implementation (June-August 2017); 12 months after implementation (October-December 2017); and 24 months after implementation (October-December 2018). This article presents results from data sampled 24 months following tax implementation. Price data were also collected at small independent stores in untaxed, neighboring Pennsylvania counties to determine whether the tax was associated with prices at bordering stores.
Details on beverage categorization, data collection, and measures are described elsewhere14 and summarized below. This research was approved by the institutional review boards of the University of Pennsylvania, Harvard T.H. Chan School of Public Health, and the Philadelphia Department of Public Health. A waiver of informed consent was approved for adult participants. For adolescent participants, a waiver of parental consent was approved and verbal assent was obtained. This study followed the Strengthening the Reporting of Observational Studies in Epidemiology (STROBE) reporting guideline.
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