Fiscal Policies and Malnutrition: Signaling Effect of the Sugar-Sweetened Beverages Tax in Catalonia, Spain

Abstract

To understand in which ways and to what extent sugar-sweetened beverages (SSBs) taxes trigger reduced consumption, the potential signaling effect of a SSBs tax introduced in Catalonia in May 2017 was analysed. To do so, a questionnaire was distributed in November 2019 in two neighbourhoods from Barcelona with different mean income levels. Associations between variables constructed from the questionnaire and their relation with declared reduced consumption were explored. The goal of this study is to disentangle the different influences of price and signaling effect on the reduction of SSBs’ consumption, analyzing the results based on socio-demographic characteristics and providing policy implications of the findings. Respondents mainly declared a higher awareness of SSBs’ risks for health made them reduced their consumption of SSBs (98.5 percent). Only 10.6 percent of them declared the new price, considered too expensive, did. Nevertheless, the tax in Catalonia seemed to have a signaling effect through the rise in price (100 percent pass-through of the law) and not so much through the awareness of the existence of the tax. The fact people had noticed the rise in price is associated to a recent knowledge of SSBs’ risks, itself related to reduced consumption in the sample. Implementing higher and more salient SSBs taxes on the shelves, and having public campaigns making sure the taxes are known among the entire population would enhance their signaling effect. Moreover, SSBs taxes seem to have the power to shape social norms and habits on the long run if part of a larger denormalization strategy targeting specific groups like young people, characterized by their high consumption of SSBs and smaller responsiveness to the signaling effect of taxes.