Seminars

Thursday, January 16th 2025

Maxime Tranchard (PSAE) will present  "The UK Soft Drinks Levy Tax”.

Abstract:

This paper investigates the implementation of the Soft Drinks Industry Levy (SDIL) in the United Kingdom, leveraging panel data from 2015 to 2018 to assess the policy's impacts. Introduced in April 2018, the SDIL is a targeted fiscal intervention designed to reduce sugar consumption through a price-based mechanism. Under the policy, beverages with sugar content exceeding 5g per 100ml are subject to an 18p per liter levy, with an additional 8p for products exceeding 8g, leaving part of the supply chain untouched by regulation.
While prior research has examined the immediate effects of the SDIL on consumption patterns, pricing strategies, and product reformulation—highlighting significant reformulation efforts in the pre-implementation phase—this study advances the literature by adopting a structural approach. By integrating consumer panel data across pre- and post-implementation phases, this analysis disentangles the causal effects of the levy from broader market trends. Furthermore, the structural framework enables counterfactual simulations, allowing us to assess the policy’s potential impacts in a pre-policy environment and to explore optimal taxation designs.