News / Sugary Drinks Duty

Employment impact of sugary drinks taxes

"Sugary drink taxes do not have a negative impact on employment, and industry claims of  job losses are overstated and may mislead policy-makers and the public." That is the verdict of a peer-reviewed article published in the American Journal of Public Health.

The academics involved modelled the impact a soda tax might have in two states in the US, and found there might actually be a small net increase in jobs. This is supported by economists who Sustain consulted on the impact that a 20p per litre sugary drinks tax might have on employment.

The economists stated:

"If the sugary drinks tax causes consumers to switch to other soft drinks, then the exact impact on employment will be determined by: (1) the proportion of demand that switches to non-sugary soft drinks; and (2) the labour intensity of manufacturing sugary soft drinks versus non-sugary soft drinks.  If labour intensity is approximately equal across all soft drink types, then there will be no substantive net impact on total employment in the soft drinks sector – irrespective of the number of consumers switching from sugary soft drinks to other soft drinks." 

The economists also highlighted how there might be potential job gains in other sectors, depending on which products people swapped to from sugary drinks, and what else they spent the money on they saved from buying fewer sugary drinks.

That is a point backed up by Dr Ben Richardson, Associate Professor in International Political Economy at the University of Warwick. He commented (in a statement given to Action on Sugar), that there would likely be increased increased employment in the dairy industry, which stands to benefit from a 3.7% increase in the volume of milk sold due to people switching to drinking milk and no/low sugar milk drinks.

Published 16 Aug 2016

Sugary Drinks Duty: Support the campaign for a sugary drinks duty, to pay for programmes to improve childrens health and protect the environment they grow up in.

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