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Changes in beverage purchases following the announcement and implementation of South Africa's Health Promotion Levy: an observational study

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  • Stacey, Nicholas
  • Edoka, Ijeoma
  • Hofman, Karen
  • Swart, Elizabeth C
  • Popkin, Barry
  • Ng, Shu Wen

Abstract

BACKGROUND: In 2016, South Africa announced an intention to levy a tax on sugar-sweetened beverages (SSBs). In 2018, the country implemented an SSB tax of approximately 10%, known as the Health Promotion Levy (HPL). We aimed to assess changes in the purchases of beverages before and after the HPL announcement and implementation. METHODS: We used Kantar Europanel data on monthly household purchases between January, 2014, and March, 2019, among a sample of South African households (n=113 653 household-month observations) from all nine provinces to obtain per-capita sugar, calories, and volume from taxable and non-taxable beverages purchased before and after the HPL announcement and implementation. We describe survey-weighted means for each period, and regression-controlled predictions of outcomes and counterfactuals based on pre-HPL announcement trends, with bootstrapped 95% CIs, and stratify results by socioeconomic status. FINDINGS: Mean sugar from taxable beverage purchases fell from 16·25 g/capita per day (95% CI 15·80-16·70) to 14·26 (13·85-14·67) from the pre-HPL announcement to post-announcement period, and then to 10·63 g/capita per day (10·22-11·04) in the year after implementation. Mean volumes of taxable beverage purchases fell from 518·99 mL/capita per day (506·90-531·08) to 492·16 (481·28-503·04) from pre-announcement to post announcement, and then to 443·39 mL/capita per day (430·10-456·56) after implementation. Across these time periods, there was a small increase in the purchases of non-taxable beverages, from 283·45 mL/capita per day (273·34-293·56) pre-announcement to 312·94 (296·29-329·29) post implementation. When compared with pre-announcement counterfactual trends, reductions in taxable beverage purchase outcomes were significantly larger than the unadjusted survey-weighted observed reductions. Households with lower socioeconomic status purchased larger amounts of taxable beverages in the pre-announcement period than did households with higher socioeconomic status, but demonstrated bigger reductions after the tax was implemented. INTERPRETATION: The announcement and introduction of South Africa's HPL were followed by reductions in the sugar, calories, and volume of beverage purchases. FUNDING: Bloomberg Philanthropies, International Development Research Centre, South African Medical Research Council, and the US National Institutes of Health.

Suggested Citation

  • Stacey, Nicholas & Edoka, Ijeoma & Hofman, Karen & Swart, Elizabeth C & Popkin, Barry & Ng, Shu Wen, 2021. "Changes in beverage purchases following the announcement and implementation of South Africa's Health Promotion Levy: an observational study," LSE Research Online Documents on Economics 109878, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:109878
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    Cited by:

    1. Bercholz, Maxime & Ng, Shu Wen & Stacey, Nicholas & Swart, Elizabeth C., 2022. "Decomposing consumer and producer effects on sugar from beverage purchases after a sugar-based tax on beverages in South Africa," Economics & Human Biology, Elsevier, vol. 46(C).
    2. Elena Ye. Chernyakova & Anna F. Bogatyreva & Ekaterina A. Yastrebova, 2023. "Международный Опыт Налогообложения Сахаросодержащих Напитков," Russian Economic Development (in Russian), Gaidar Institute for Economic Policy, issue 12, pages 65-73, December.
    3. Michael Essman & Lindsey Smith Taillie & Tamryn Frank & Shu Wen Ng & Barry M Popkin & Elizabeth C Swart, 2021. "Taxed and untaxed beverage intake by South African young adults after a national sugar-sweetened beverage tax: A before-and-after study," PLOS Medicine, Public Library of Science, vol. 18(5), pages 1-17, May.
    4. Hofman, Karen J. & Stacey, Nicholas & Swart, Elizabeth C. & Popkin, Barry M. & Ng, Shu Wen, 2021. "South Africa's Health Promotion Levy: excise tax findings and equity potential," LSE Research Online Documents on Economics 110921, London School of Economics and Political Science, LSE Library.
    5. Elena Ye. Chernyakova & Anna F. Bogatyreva & Ekaterina A. Yastrebova, 2023. "International Experience in Taxation of Sugar-Sweetened Beverages [Международный Опыт Налогообложения Сахаросодержащих Напитков]," Russian Economic Development, Gaidar Institute for Economic Policy, issue 12, pages 65-73, December.

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    Keywords

    108424–001;

    JEL classification:

    • N0 - Economic History - - General
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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