Berkeley’s Excise Tax On Sugary Drinks Boosts Water Purchases

To discourage consumption of sugar-sweetened beverages (SSB), which have been linked to weight gain, diabetes, cardiovascular disease, and tooth decay, Berkeley, Calif., in 2014 joined 20 countries in imposing an excise tax on sugary drinks. Researchers who studied the impact of the tax on SSB consumption found that prices increased, sales dropped by as much as 10 percent in some (but not all) places, and sales of untaxed drinks, especially water, increased by as much as 16 percent. The researchers found no evidence of higher grocery bills for consumers, loss of gross revenue per transaction for stores, or decreases in overall beverage sales for stores.