"30% Tax Increase on Cola and Coffee Leads to 30% Drop in Sales" Sugar Tax Effect 'Controversy'

'Sugar' Causing Chronic Diseases
US Beverage Association: "60% of Drinks Contain No Sugar"
Immediate Consumption Drop Due to Consumer Price Changes

A study has found that imposing taxes on sugar-sweetened beverages leads to a 33% decrease in consumer sales.

On the 11th, CNN and others reported that raising the prices of sugar-sweetened carbonated drinks, coffee, tea, and fruit beverages by an average of 31% results in about a one-third reduction in consumer purchases. Scott Kaplan, the study's author and an assistant professor of economics at the U.S. Naval Academy in Annapolis, Maryland, stated, "What we measured was how sensitively consumers respond to price changes and how that leads to changes in consumption," adding, "We found that for every 1% increase in price, product purchases decreased by 1%." He further noted, "The reduction in consumer purchases of (sugar-sweetened) beverages occurred almost immediately after the tax was introduced and continued throughout the study period." Previously, some U.S. cities such as Berkeley have implemented sugar taxes on sugar-containing beverages to reduce the incidence of adult diseases.

However, William Dermody, vice president of the American Beverage Association, argued that such taxes are unproductive and instead harm consumers and small businesses. Vice President Dermody pointed out, "The beverage industry's strategy of offering consumers more choices through less sugar and clear calorie labeling is proving effective," adding, "Nearly 60% of all beverages sold today contain no sugar, and the calories people get from beverages have dropped to the lowest level in decades."

CNN reported that sugar-sweetened beverages are not only high in calories but also linked to chronic diseases including heart disease, cancer, diabetes, and obesity.

There was also research indicating that sugar-containing beverages increase the risk of premature death. Referring to a 2019 study, Professor Kaplan said, "If consumption of sugar-laden beverages decreases by 15% to 20%, it could reduce healthcare costs by $270 (about 350,000 KRW) per person over the average American lifespan. This translates to a total national reduction of $45 billion (about 59.2335 trillion KRW)."