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Taxing Pop Makes Consumption Drop

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Taxing Pop Makes Consumption Drop

Pop.

Photo: Páll Stefánsson.

A new study shows that the price of pop affects its consumption, mbl.is reports. In Iceland, the price of soft drinks is relatively low, and, not surprisingly, Icelanders consume much more soda than do other Nordic nations.

At a forum called Sugar Consumption of Icelanders—Public Health Threat?, Nutrition Professor Laufey Steingrímsdóttir, University of Iceland, will be presenting the results of a new study done by the Faculty for Science and Nutrition and by the Faculty of Economics on the development of sugar consumption in Iceland and possible influences and explanations thereof. The forum is part of a conference held at the University of Iceland today and tomorrow.

The study reveals that for every percentage point that the price of pop went up, demand for it went down by the same amount. “Taxation is an effective way to control consumption,” Laufey told mbl.is.

The study looked at the relationship between the demand for and the price of pop from 1997 to 2016. Data on which the study relied included price surveys from Iceland Statistics, information on food supply from the Directorate of Health, as well as results of national studies on nutrition from 1990, 2002 and 2012.

Laufey pointed out that people who have trouble making ends meet consume more soda than do other groups. Sugar consumption has gone down in Iceland in the past 15 years, but, according to Laufey, it’s still too high. At the same time, soda and candy consumption is up.

A sugar tax was implemented in Iceland in March of 2013, but repealed on January 1, 2015. Laufey stated that when the tax was repealed, its effect was not adequately researched. Laufey advocates using taxation to affect consumption. She noted that repealing a 30 percent tax on greenhouse vegetables in 2002 greatly increased its consumption.

Laufey emphasized the importance of educating people on the danger of excessive sugar consumption, but that alone, she asserted, will not do. “There is a consensus in society about taxing alcohol and tobacco, because we know it’s dangerous.” She concluded, “For our society, limiting its consumption is beneficial. The same is true for soft drinks. It’s economically feasible to tax soda.”

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