Colored empty beverage cans top view.

    The sugar tax in Chile reduced consumption – but hasn’t improved public health

    6 July 2018

    A sugar tax introduced on soft drinks in Chile has failed to reduce inequalities in diet-related health, new research has revealed.

    Researchers analysed household grocery purchasing data for three years before the tax was introduced and for one year afterwards. The tax was introduced in Chile in 2014.

    The policy targeted any non-alcoholic beverages to which colourants, flavourings or sweeteners have been added. For beverages with an added sugar concentration of 6.25 grams per 100ml or more, the existing tax was increased from 13 per cent to 18 per cent; while for those below this threshold, the tax was decreased from 13 per cent to 10 per cent, producing an 8 per cent tax difference.

    For example, the tax change, if fully transmitted to the consumer, would increase the prices of a 500ml sugary beverage from 500 pesos (£0.60) to 525 pesos (£0.62), and it would drop the price of an equally priced non-sugary beverage to 485 pesos (£0.57).

    The authors of the report conclude that despite the tax incentive being comparatively small, there are signs that purchasing of beverages with higher sugar content declined, particularly among high socioeconomic groups – though this was deemed statistically insignificant.

    The study revealed an overall 21.6 per cent decrease in the monthly purchased volume of the higher taxed, sugary soft drinks. Among middle and high socioeconomic groups, the monthly purchased volume fell by 16 per cent and 31 per cent, respectively. There was a 12 per cent reduction in purchase volume for the low socioeconomic group.

    By contrast, the volume of non-sugary soft drinks, for which the tax rate had been decreased, showed no increase in purchased volume for any socioeconomic groups.

    Marc Suhrcke, Professor of Global Health Economics at the University of York, said: ‘The results suggest that the Chilean tax policy may have been effective in reducing consumption of sugary drinks, though not necessarily to reduce socioeconomic inequalities in diet-related health.’

    ‘Further evaluations are needed to analyse the policy effect on purchasing of soft drinks in the long run as well as to evaluate the impact on health outcomes.’

    Professor Cuadrado, from the University of Chile, said: ‘Our results suggest an overall reduction of sugar consumption after the implementation of the tax in Chile. From a public health perspective, even a small reduction in sugar intake at the population level could lead to significant health gains.’

    ‘Other countries may take heart from our findings, in that it indicates that the tax incentive may not need to be huge to have impact. It also shows that there may be more than one way in which an SSB tax can be implemented with some success.’