The impact of the French soda tax on prices and purchases. An ex post evaluation

Abstract

We estimate the price and consumption effects of the 2012 French tax on sweetened non-alcoholic drinks using a difference-in-difference approach. Our identification strategy exploits Italian data as a natural control group. We use French and Italian Consumer Price Indices, purchase prices and quantities from the 2011 and 2012 Kantar and GfK home-scan surveys for two French regions and two neighbouring Italian regions, and expenditure data from the 2011 and 2012 Italian Expenditure Survey. We check for the robustness of our results by applying the difference-in-difference models using only French data and considering water as the benchmark (control) good. We find that the tax is transmitted to the prices of taxed drinks, with full transmission for soft drinks and partial transmission for fruit juices. The evidence on purchase responses is mixed and less robust, indicating at most a very small reduction in soft drink purchases (about half a litre per capita per year), an impact which would be consistent with the low tax rate. We find suggestive evidence of a larger response by the sub-sample of heavy purchasers. Fruit juices and water do not seem to have been affected by the tax.

The effects of an abrupt increase in taxes on candy and soda in Norway: an observational study of retail sales

“…A study using self-scanned purchases from a panel of 6253 Mexican households reported a 6% reduction in taxed beverages after the implementation of a SSB-tax [23]. As an example of more inconclusive results, the evaluation of a French soda tax reported mixed evidence from analyses of purchase responses [26].…”

Projected impact of the Portuguese sugar-sweetened beverage tax on obesity incidence across different age groups: A modelling study

“…There is substantial methodological diversity in studies assessing the effectiveness (pre-and post-tax) of levies introduced on SSBs in different countries. Most studies evaluating the effectiveness of a sugar tax focus on sales and price changes [32][33][34][35][36][37][38]. Studies from the US on adults, children, and adolescents used SSB sales data combined with data from the National Health and Nutrition Examination Survey, which includes a direct measurement of BMI.…”

Obesity: Health and Economic Consequences of an Impending Global Challenge

“…Based on a study of about a half million price records for non-alcoholic beverages, the tax was shifted to cover all carbonated beverages and partially to fruit drinks (Berardi et al 2016). An alternate study in France compared consumer purchase data from two French regions and two neighboring Italian regions with longitudinal fixed effects models and found differential price increases linked to the tax by drink category with an average of €0.07-€0.08 (Capacci et al 2016). They also found a statistically significant but small reduction in purchases of carbonated SSBs (0.08 liters per week) and fruit drinks (0.4 liters per week) and an overall decline in taxed drinks (of 0.09 liters per week).…”

“…In January 2012, France introduced a tax of €7.16 per hectoliter of non-alcoholic beverages with added sugar or sweeteners, including sodas, fruit drinks, and flavored waters. Capacci et al (2016) examined to what extent the tax was passed on to consumers through a price increase on the taxed beverages. Findings suggest that within six months soda prices increased fully by the SSB tax amount of about 11 cents for 1.5 liter of soda.…”