Seattle Sweetened Beverage Tax Evaluation: Impact on Prices 6-month results Presented by: Jesse Jones-Smith, PhD, MPH
SBT IMPACT ON BEVERAGE PRICES THE GOAL rice of beverages subject to the tax. To estimate th the i imp mpact o t of th the t tax o on th the p pri THE BASICS A R A RETAI AIL A AUDIT P PRE an and P POST T TAX AX I IMPLEMENTATION : In-person surveys of beverage prices stores in Se Seattle and Comparison Area (Kent, Auburn, Federal Way) be before and and aft fter tax : 6-MO MONTH PO POST-TA TAX Tax starts PRE-TA PR TAX January Survey Survey 2018 June November 2018 2017 2
SBT PRICE IMPACT PRICE PASS-THROUGH TAX IS LEVIED ON DISTRIBUTORS, UNCLEAR WHETHER DISTRIBUTORS WOULD PASS ON THE COST OF THE TAX TO THE CONUMER. Distributors TAX 3
Methods & Results
SBT PRICE IMPACT DATA COLLECTION In-person surveys of stores in Se Seattle and Co Comp mparison Area (Kent, Auburn, Federal Way) Geographically balance ced sample with quota from different store types Surveys done Oct ctober-No Novem ember er 2017 2017 (pre-tax) and Ma May-Ju July 2018 2018 (post-tax) 5
SBT PRICE IMPACT DATA COLLECTION Supermarkets & Grocery & Small Warehouses superstores drug stores stores Quick-service Beverage restaurants shops 6
SBT PRICE IMPACT STORE SAMPLE 7
SBT PRICE IMPACT STORE SAMPLE Se Seattle le Com Compar aris ison on Area Fa Fall 2017 Su Summer 2018 Fall 2017 Fa Summer 2018 Su 229 204 223 209 89% 89% 90% 90% re re-sur urvey rate re-sur re urvey rate 8
SBT PRICE IMPACT BEVERAGE CATEGORIES Non-taxed No d BE BEVERAGE TAX No Non-taxed d Taxed Ta sug ugar-sweetene ned CATEGORIES CA sug ugar-fr free ee 3 be beverages type pes: • 7 be beverages 10 be beverages type pes: chocolate milk type pes • diet soda • BE BEVERAGE TYPE powdered drinks • 100% juice • Soda • prepared sweetened • diet sports drink • juice drink • coffee diet energy drink • sports drink • water • energy drink • Milk • bottled tea powdered sugar-free • prepared tea • drink mix bottled coffee • bottled unsweetened • sugary flavor shot • tea prepared coffees • sugar-free flavor shot • 9
SBT PRICE IMPACT KEY VARIABLES BE BEVERAGE PRICE CE The primary outcome, in CE CENTS PER OUNCE CE , using the lowest price available on the day the store was surveyed. 10
SBT PRICE IMPACT STATISTICAL ANALYSES THE GOAL To estimate the impact of the tax on the price of beverages subject to the tax. THE MODEL We use a regression-based dif differenc nce-in in-dif differenc nce mode del to estimate th the d degree t to wh which th the nd price changes for th pr pric ice of be beverag ages in in Seattle le chang hanged d abo above and and be beyond the s same me b beverages i in th the c comp mpari rison a area from baseline to six-months post-tax . 11
RETAIL AUDIT TAX IMPACT ANALYSES HOW THE DIFFERENCE-IN-DIFFERENCE MODEL WORKS Se Seattle = $0. $0.35 35 $2. $2.35 35 $2. $2.00 00 June 2018 DIFFERENCE IN SEATTLE November 2017 $0. $0.30 30 Compari Co rison Area DIFFERENCE-IN-DIFFERENCE = $0. $0.05 05 $2.00 $2. 00 $2.05 $2. 05 November 2017 June 2018 DIFFERENCE IN COMPARISON 12
SBT PRICE IMPACT PRICE PASS-THROUGH THE AMOUNT OF TAXED PASSED ON TO CONSUMERS Distributors TAX 1.75 ₵/OZ = 100% PASS THROUGH 13
SBT PRICE IMPACT RESULTS OVERALL AVERAGE SEATTLE PRICE PASS-THROUGH RESULTS 1.70 ₵ 97% The price of taxed 97% of t 97% o the t e tax on beverages in average was pa passed d Seattle incr creased by through to Seattl th tle 1.70 ce cents per ounce ce co consumers . on average, over and above increases in the comparison area. TH THE E AVER ERAGE GE MASKS IMPO PORTANT T DIFFER EREN ENCES BY ST STORE E TY TYPE PE AND BEV EVER ERAGE GE TY TYPE PE 14
SBT PRICE IMPACT RESULTS AVERAGE PRICE PASS-THROUGH BY BY BEVERAGE TYPE 1.78 ₵ 1.47 ₵ 1.11 ₵ 1.09 ₵ 102% 84% 63% 62% Pass-through for Seattle Pass-through for Seattle Pass-through for Seattle Pass-through for Seattle su sugar-sw sweetened juice e drinks . sugar-sw su sweetened teas soda so Bo Bottled coffee drinks . & sports & ts drin inks . 15
SBT PRICE IMPACT RESULTS AVERAGE TAXED DRINK PRICE PASS-THROUGH BY BY STORE TYPE 1.82 ₵ 1.43 ₵ 1.51 ₵ 1.80 ₵ 104% 82% 86% 103% Pass-through in Seattle Pass-through in Seattle Pass-through in Seattle Pass-through in Seattle su superm rmark rkets s & sm small stores qui quick-se service groc gr ocery stor ores su superstores re resta taurants & drug stores & 16
SBT PRICE IMPACT RESULTS AVERAGE NON NON-TA TAXED DRINK PRICE PASS-THROUGH BY ST STORE TYPE 0.47 ₵ 0.77 ₵ 0.0 ₵ 27% 44% 0% Pass-through in Seattle Pass-through in Seattle Pass-through in Seattle sm small stores . grocery gr y stores & dr drug ug supermarkets su s & superstores . su st store res . *Increase in price in small stores driven by increased price of diet soda, diet energy drinks, and bottled tea 17
SBT PRICE IMPACT RESULTS OVERALL SEATTLE PRICE RESULTS Applying the average 1.7 .70 ce cents pe per r ounce unce incr ncrease to 12 12-pac pack of sug ugar ar-sw sweetened drinks 20 oz sugar-sw 20 sweetened drink $2. $2.33 33 $3. $3.15 15 $5. $5.59 59 $1.99 $1. 99 Post-tax Pre-tax Post-tax Pre-tax 18
SBT PRICE IMPACT RESULTS PRICE TAG LABELING STRATEGIES 24% 45% Tax pri price ce incl nclude uded d in No tax No x mention price on price tag, and on price tag identified as an add-on 11% 17% Tax pri price ce incl nclude uded Price tag says tax will be in price on price adde dded d at the he register but tag, not identified does not include add-on as an add-on price on tag 19
SBT PRICE IMPACT LIMITATIONS Although we surveyed a large sample of beverages of various sizes, we di did no not me measure all beverages. We have on only a s a sam ampl ple of stores es rather than a census of all stores. We did not incl clude some popular stores such as Whole Foods, Trader Joe’s, and PCC because these stores devote relatively little shelf space to sugary beverages. 20
SBT PRICE IMPACT KEY TAKEAWAYS Ta Tax on sugary Price increases di differed b d by Price ces incr creased statistically Price increases di differed d be beverages i is be being ng st store type. Increased across significantly fo for nearly all by by beverage type , with pa passed t d thr hroug ugh t h to store types, but lar largest beverages types subject ct to the largest incr creases for co consumers via higher incr creases in smaller groce cery th the tax. sodas so s and energy drinks . ces of these retail price st stores, small st stores, and beverages. drug s drug stores 21
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