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Effect of increasing the price of sugar-sweetened beverages on alcoholic beverage purchases: an economic analysis of sales data
  1. Diana Quirmbach Dr1,2,
  2. Laura Cornelsen1,
  3. Susan A Jebb2,3,
  4. Theresa Marteau2,
  5. Richard Smith1,2
  1. 1 Faculty of Public Health and Policy, London School of Hygiene and Tropical Medicine, London, UK
  2. 2 Behaviour and Health Research Unit, Institute of Public Health, University of Cambridge, Cambridge, UK
  3. 3 Nuffield Department of Primary Care Health Sciences, University of Oxford, Oxford, UK
  1. Correspondence to Professor Richard Smith, Faculty of Public Health and Policy, London School of Hygiene and Tropical Medicine, London WC1H 9SH, UK; richard.smith{at}lshtm.ac.uk

Abstract

Background Taxing soft-drinks may reduce their purchase, but assessing the impact on health demands wider consideration on alternative beverage choices. Effects on alcoholic drinks are of particular concern, as many contain similar or greater amounts of sugar than soft-drinks and have additional health harms. Changes in consumption of alcoholic drinks may reinforce or negate the intended effect of price changes for soft-drinks.

Methods A partial demand model, adapted from the Almost Ideal Demand System, was applied to Kantar Worldpanel data from 31 919 households from January 2012 to December 2013, covering drink purchases for home consumption, providing ~6 million purchases aggregated into 11 groups, including three levels of soft-drink, three of other non-alcoholic drinks and five of alcoholic drinks.

Results An increase in the price of high-sugar drinks leads to an increase in the purchase of lager, an increase in the price of medium-sugar drinks reduces purchases of alcoholic drinks, while an increase in the price of diet/low-sugar drinks increases purchases of beer, cider and wines. Overall, the effects of price rises are greatest in the low-income group.

Conclusion Increasing the price of soft-drinks may change purchase patterns for alcohol. Increasing the price of medium-sugar drinks has the potential to have a multiplier-effect beneficial to health through reducing alcohol purchases, with the converse for increases in the price of diet-drinks. Although the reasons for such associations cannot be explained from this analysis, requiring further study, the design of fiscal interventions should now consider these wider potential outcomes.

  • Alcohol
  • SSB
  • Economics
  • elasticity
  • Tax

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Footnotes

  • Contributors All authors contributed to the conceptual development of the research, review of analysis and interpretation of results. The analytical work was conducted primarily by DQ and LC, with supervision from RS.

  • Funding This study was funded by the UK Department of Health Policy Research Programme (107/0001-Policy Research Unit in Behaviour and Health). LC is funded by an MRC fellowship grant MR/L012324/1. The views expressed in this article are those of the authors and not necessarily those of the UK Department of Health. The UK Department of Health had no role in the writing of the manuscript but approved the decision to submit the manuscript for publication.

  • Competing interests None declared.

  • Provenance and peer review Not commissioned; externally peer reviewed.

  • Correction notice This article has been corrected since it was published Online First. Any references to ’Kantar WorldPanel' or ’KWP' have been corrected to ’Kantar Worldpanel'.

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