Sugary drinks are a major source of sugar in the diet, and the consumption of sugar is increasing, especially among children and adolescents. On average, a single can of a sugary drink contains around 40 grams of free sugars. To address this, countries and cities have been introducing taxes on sugar drinks, and positive results are coming in.

The city of Oakland in the state of California set a one-cent-per-ounce tax back in December 2017 and since then purchases of sugar-sweetened beverages (SSB) have dropped almost 27%, according to a new study. This has likely improved people’s health and saved the city money due to lower overall health costs, researchers said.

“These results suggest SSB taxes can meaningfully improve diet and health and generate substantial cost savings over a sustained period of time, all of which support the case for a national tax on SSBs,” Dean Schillinger, senior author of the study and professor of medicine at the University of California San Francisco, said in a statement.

Sugary drink taxes

Over-consumption of sugar is a major contributor to obesity, diabetes, and tooth decay, among other health problems. The World Health Organization recommends adults and children limit their consumption of free sugars to less than 10% of their daily energy intake. This equals around 12 teaspoons of table sugar for adults.

The new study was done about one year after the National Clinical Care Commission advised that a national tax on sugar-sweetened beverages be implemented in the US. It’s also been five years since California state legislators banned cities and counties from imposing new taxes on SSBs, except for existing taxes, such as in Oakland.

For their research, Schillinger and his team compared the purchases of sugary drinks purchases in Oakland to purchases in the nearby cities of Richmond and Los Angeles in California, which have no sugary drink tax. They focused on consumer behavior in these cities in the 30 months before and after the tax went into effect on July 1st, 2017.

They then used computer simulations to approximate the impact of lower purchases of SSBs on the overall health of the community, as measured by quality-adjusted life-years (QALYs). These are defined as years of ideal health. They also estimated the healthcare cost savings resulting from avoiding or managing SSB-related illnesses.

The study found that decreasing SSB consumption by 26.8% over a decade resulted in 94 QALYs per 10,000 residents and saved the city over $100,000 per 10,000 residents in healthcare expenses. The benefits were anticipated to increase later in life. They found no evidence of customers going to untaxed neighboring regions to buy sugary beverages.

“Our estimates suggest this tax is at least as cost-effective as other widely recognized public health interventions such as smoke-free workplace policies and air pollution control measures,” first author Justin White, associate professor of health economics at UCSF’s Philip R. Lee Institute for Health Policy Studies, said in a statement.

The WHO has recommended taxation on sugary drinks as an “effective intervention” to reduce sugar consumption. As of 2021, seven cities in the US and over 35 countries had implemented SSB taxes, the researchers said. Previous studies have found similar health benefits from the sugary drink tax in the UK, Mexico, and in Caribbean nations.

The study was published in the journal PLOS Medicine.