Background

Sugar-sweetened beverage (SSB) taxes are gaining momentum around the world as a promising policy approach to reduce SSB consumption. Philadelphia’s 1.5 cent-per-ounce excise tax on sugar- and artificially-sweetened beverages implemented January 1, 2017 created a natural experiment to evaluate the tax’s effect on beverage prices and purchase volume in independent stores. Small, independent stores in urban areas are frequently visited by low-income customers who commonly purchase sugar-sweetened beverages (SSBs) at these stores. There are no data, however, on the association between beverage taxes and change in beverage purchases in these settings.

Methods

We used a difference-in-differences approach, to compare changes in beverage prices and purchases at independent stores in Philadelphia and Baltimore (a non-taxed control) before tax implementation and 12 months after tax implementation. The sample included 134 independent stores (44 in Philadelphia, 45 in Baltimore, and 45 in neighboring counties) and 4584 customer purchase assessments at 121 independent stores in Philadelphia and Baltimore (baseline=2.001 and 12 months=2,583). We measured the change in: 1) price (¢/oz) of taxed and non-taxed beverages and 2) purchases (ounces) of taxed and non-taxed beverages.

Results

At 12 months, taxed beverages in Philadelphia had a price increase of 1.81 ¢/oz. (120.4% tax pass-through; 95% CI, 1.52 to 2.09, p<0·001) compared to Baltimore, while non-taxed beverages had no statistically significant price change. At 12 months, we observed a 5.76 ounce or 38.9% decline (95% CI -9·64, -1·89, p=0.002) in taxed beverage purchases in Philadelphia compared to Baltimore, and no significant change in the purchase of non-taxed beverage ounces.

Conclusions

Beverage excise taxes may be an effective policy tool to decrease sweetened drink purchases in small, urban, independent stores. More research is needed to understand the degree to which customers avoid the tax by shopping in non-taxed, neighboring jurisdictions.