Berkeley Soda Tax Means Higher Prices on Some Sugary Drinks

In order for Berkeley's penny-an-ounce soda tax to work, advocates say, retailers have to pass it through to customers. That way, the shoppers will see the higher price on the shelf, and some will choose lower priced (i.e. non-sugary) drinks.

In an analysis, UC Berkeley researchers say many retailers are doing just that. They sampled prices in Berkeley, Oakland and San Francisco, just before last November's election when Berkeley voters overwhelmingly passed the first-in-the-country soda tax.

Then they sampled prices again last summer, after the tax had gone into effect March 1. They found that retailers were passing through 69 percent of the tax on sodas and 47 percent of the tax on average for all sugar-sweetened beverages.

For a 20-ounce soda that had cost $1.75 now would cost $1.89, a 14-cent increase.

Lead author Jennifer Falbe, a post-doctoral researcher in the UC Berkeley School of Public Health, said she was encouraged by these  findings.

"It’s promising that so early after implementation, we’re already seeing prices increase," she said. "However, because it is so early, it’s worth it to continue to monitor how the prices change to see where prices ultimately end up."

The analysis is published in the American Journal of Public Health.

In August, another study found a similar result -- less than half of the tax was passed through. Oddly, researchers found that the pass through for Coke and Pepsi was only 22 percent.

Falbe said some store owners had told the research team that they planned to raise prices. "Some store owners said they hadn't had a chance to go through their invoices to find out how much they should be rising prices on all their beverages," Falbe said.

The study did not address if the higher price means people are buying fewer sugary drinks. Falbe said her team is in the process of looking at that data.