Evaluating the 2014 sugar-sweetened beverage tax in Chile: An observational study in urban areas

Abstract

BackgroundIn October 2014, Chile implemented a tax modification on sugar-sweetened beverages (SSBs) called the Impuesto Adicional a las Bebidas Analcohólicas (IABA). The design of the tax was unique, increasing the tax on soft drinks above 6.25 grams of added sugar per 100 mL and decreasing the tax for those below this threshold.Methods and findingsThis study evaluates Chile’s SSB tax, which was announced in March 2014 and implemented in October 2014. We used household-level grocery-purchasing data from 2011 to 2015 for 2,836 households living in cities representative of the urban population of Chile. We employed a fixed-effects econometric approach and estimated the before–after change in purchasing of SSBs controlling for seasonality, general time trend, temperature, and economic fluctuations as well as time-invariant household characteristics. Results showed significant changes in purchasing for the statistically preferred model: while there was a barely significant decrease in the volume of all soft drinks, there was a highly significant decrease in the monthly purchased volume of the higher-taxed, sugary soft drinks by 21.6%. The direction of this reduction was robust to different empirical modelling approaches, but the statistical significance and the magnitude of the changes varied considerably. The reduction in soft drink purchasing was most evident amongst higher socioeconomic groups and higher pretax purchasers of sugary soft drinks. There was no systematic, robust pattern in the estimates by household obesity status. After tax implementation, the purchase prices of soft drinks decreased for the items for which the tax rate was reduced, but they remained unchanged for sugary items, for which the tax was increased. However, the purchase prices increased for sugary soft drinks at the time of the policy announcement. The main limitations include a lack of a randomised design, limiting the extent of causal inference possible, and the focus on purchasing data rather than consumption or health outcomes.ConclusionsThe results of subgroup analyses suggest that the policy may have been partially effective, though not necessarily in ways that are likely to reduce socioeconomic inequalities in diet-related health. It remains unclear whether the policy has had a major, overall population-level impact. Additionally, because the present study examined purchasing of soft drinks for only 1 year, a longer-term evaluation—ideally including an assessment of consumption and health impacts—should be conducted in future research.Trial registrationClinicalTrials.gov Identifier: NCT02926001

What to expect from the price of healthy and unhealthy foods over time? The case from Brazil

“…Current evidence supports the implementation of taxes that increase the price of products by 20 % or more to reduce the consumption of unhealthy foods (36) . The WHO already indicated this measure for sweetened beverages in 2016 (38) and several countries have considered or already adopted this measure, such as Mexico (with 10 % tax on sweetened beverages and 8 % tax on ultra-processed foods with energy density above 1151 kJ (275 kcal)/100 g) (23) and Chile (in 2014, the tax for beverages with an added sugar concentration above 6•25 g/100 ml increased from 13 to 18 %) (39) . In Brazil, several bills on the subject are under discussion in the National Congress; however, due to strong resistance from the Big Soda industry and some groups of Federal Legislators (largely financed by the Big Food and Big Soda industries), little progress has been made so far (40) .…”

Impact of sugar‐sweetened beverage taxes on purchases and dietary intake: Systematic review and meta‐analysis

“…However, a study of a 5% tax in Chile reported significantly greater declines in consumption among the highest SEP groups, 31 and a similar pattern was reported by the second Chile study. 33 The…”

Obesity: Health and Economic Consequences of an Impending Global Challenge

“…Price increases in the 3.1-3.5 percent range were found by two studies using identical data; however, one found purchases declined slightly, which seemed appropriate for this small price increase (a volume reduction of 3.4 percent in SSBs, an increase in low-taxed items of 10.7 percent, and a total calorie decrease of 4.0 percent; Caro et al 2018). A different study with the same data found the unbelievable result of a 21.6 percent decline in the volume of higher taxed SSBs purchased, with no effect on the lower tax category in Chile (Nakamura et al 2018). These two studies are indicative of the complexity of studying the impact of these complex taxes using different econometric approaches and classifying products into various tax categories.…”

“…Tax simulations from Chile indicate that an 18 percent tax on ultraprocessed junk foods and beverages (those high in fats, salt, sugars) is associated with the highest reduction in intake of calories, sodium, saturated fats, and added sugar, compared with alternative policies (Caro, Ng, Taillie et al 2017). Another study from Chile found a drop of 21.6 percent in the monthly purchased volume of higher-taxed sugary soft drinks (Nakamura et al 2018), but an alternate study using the same data set found, for the same 3.1 percent price increase, only a comparable 3 percent reduction in purchases (Caro et al 2018). Both studies found the same small price increase but the Nakamura one found a much larger, almost unbelievable, purchase reduction from this small price increase.…”