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Decomposing consumer and producer effects on sugar from beverage purchases after a sugar-based tax on beverages in South Africa.
Econ Hum Biol. 2022 08; 46:101136.EH

Abstract

Growing global concern about obesity and diet-related non-communicable diseases has raised interest in fiscal policy as a tool to reduce this disease burden and its social costs, especially excise taxes on sugar-sweetened beverages (SSBs). Of particular interest have been nutrient-based taxes to improve diet quality. These can incentivize producers to reformulate existing products and introduce healthier alternatives into their ranges. In 2018, South Africa adopted a sugar-based tax on SSBs, the Health Promotion Levy (HPL). Early findings suggest that purchases of higher-sugar taxable beverages fell and purchases of no- and lower-sugar beverages increased, alongside significant reductions in the sugar content of overall beverage purchases. However, underlying these changes are consumption shifts as well as product reformulation and changes in producers' product portfolios. Drawing on a household scanner dataset, this study employed a descriptive approach to decompose changes in the sugar content of households' non-alcoholic beverage purchases into producer factors (reformulation and product entry and exit) and consumer factors (product switching and volume changes as a result of price changes, changing preferences, or other factors). We look at these factors as the tax was announced and implemented across a sample of over 3000 South African households, and then by Living Standard Measures (LSM) groups (middle vs. high). The sugar content of beverage purchases fell by 4.9 g/capita/day overall, a 32% decrease. Taken in isolation, consumer switching and volume changes together led to a reduction equivalent to 71% of the total change, while reformulation accounted for a decrease equal to 34% of that change. Middle-LSM households experienced larger reductions than high-LSM households due to larger changes on the consumer side. For both LSM groups, reformulation-led reductions mostly occurred after implementation, and most changes came from taxable beverage purchases. As sugary drink tax designs evolve with broader implementation globally, understanding both supply- and demand-side factors will help to better assess the population and equity potential of these policies.

Authors+Show Affiliations

Carolina Population Center, University of North Carolina at Chapel Hill, Chapel Hill, NC, United Sates.Carolina Population Center, University of North Carolina at Chapel Hill, Chapel Hill, NC, United Sates; Department of Nutrition, Gillings School of Global Public Health, University of North Carolina at Chapel Hill, Chapel Hill, NC, United Sates. Electronic address: shuwen@unc.edu.Department of Health Policy, London School of Economics and Political Science, London, United Kingdom; SAMRC/Wits Centre for Health Economics and Decision Science - PRICELESS SA, Wits School of Public Health, Faculty of Health Sciences, University of the Witwatersrand, Johannesburg, South Africa.Department of Dietetics and Nutrition, University of the Western Cape, Cape Town, South Africa; DST/NRF Center of Excellence in Food Security, University of the Western Cape, Cape Town, South Africa.

Pub Type(s)

Journal Article
Research Support, Non-U.S. Gov't

Language

eng

PubMed ID

35358759

Citation

Bercholz, Maxime, et al. "Decomposing Consumer and Producer Effects On Sugar From Beverage Purchases After a Sugar-based Tax On Beverages in South Africa." Economics and Human Biology, vol. 46, 2022, p. 101136.
Bercholz M, Ng SW, Stacey N, et al. Decomposing consumer and producer effects on sugar from beverage purchases after a sugar-based tax on beverages in South Africa. Econ Hum Biol. 2022;46:101136.
Bercholz, M., Ng, S. W., Stacey, N., & Swart, E. C. (2022). Decomposing consumer and producer effects on sugar from beverage purchases after a sugar-based tax on beverages in South Africa. Economics and Human Biology, 46, 101136. https://doi.org/10.1016/j.ehb.2022.101136
Bercholz M, et al. Decomposing Consumer and Producer Effects On Sugar From Beverage Purchases After a Sugar-based Tax On Beverages in South Africa. Econ Hum Biol. 2022;46:101136. PubMed PMID: 35358759.
* Article titles in AMA citation format should be in sentence-case
TY - JOUR T1 - Decomposing consumer and producer effects on sugar from beverage purchases after a sugar-based tax on beverages in South Africa. AU - Bercholz,Maxime, AU - Ng,Shu Wen, AU - Stacey,Nicholas, AU - Swart,Elizabeth C, Y1 - 2022/03/21/ PY - 2021/04/13/received PY - 2022/02/05/revised PY - 2022/03/16/accepted PY - 2023/08/01/pmc-release PY - 2022/4/1/pubmed PY - 2022/7/20/medline PY - 2022/3/31/entrez KW - Decomposition KW - Health Promotion Levy KW - South AfricaSugar KW - Sugar-Sweetened Beverages KW - Tax SP - 101136 EP - 101136 JF - Economics and human biology JO - Econ Hum Biol VL - 46 N2 - Growing global concern about obesity and diet-related non-communicable diseases has raised interest in fiscal policy as a tool to reduce this disease burden and its social costs, especially excise taxes on sugar-sweetened beverages (SSBs). Of particular interest have been nutrient-based taxes to improve diet quality. These can incentivize producers to reformulate existing products and introduce healthier alternatives into their ranges. In 2018, South Africa adopted a sugar-based tax on SSBs, the Health Promotion Levy (HPL). Early findings suggest that purchases of higher-sugar taxable beverages fell and purchases of no- and lower-sugar beverages increased, alongside significant reductions in the sugar content of overall beverage purchases. However, underlying these changes are consumption shifts as well as product reformulation and changes in producers' product portfolios. Drawing on a household scanner dataset, this study employed a descriptive approach to decompose changes in the sugar content of households' non-alcoholic beverage purchases into producer factors (reformulation and product entry and exit) and consumer factors (product switching and volume changes as a result of price changes, changing preferences, or other factors). We look at these factors as the tax was announced and implemented across a sample of over 3000 South African households, and then by Living Standard Measures (LSM) groups (middle vs. high). The sugar content of beverage purchases fell by 4.9 g/capita/day overall, a 32% decrease. Taken in isolation, consumer switching and volume changes together led to a reduction equivalent to 71% of the total change, while reformulation accounted for a decrease equal to 34% of that change. Middle-LSM households experienced larger reductions than high-LSM households due to larger changes on the consumer side. For both LSM groups, reformulation-led reductions mostly occurred after implementation, and most changes came from taxable beverage purchases. As sugary drink tax designs evolve with broader implementation globally, understanding both supply- and demand-side factors will help to better assess the population and equity potential of these policies. SN - 1873-6130 UR - https://www.unboundmedicine.com/medline/citation/35358759/Decomposing_consumer_and_producer_effects_on_sugar_from_beverage_purchases_after_a_sugar_based_tax_on_beverages_in_South_Africa_ L2 - https://linkinghub.elsevier.com/retrieve/pii/S1570-677X(22)00032-6 DB - PRIME DP - Unbound Medicine ER -