Mar 02, 2015 02:09 PM EST By Staff Reporter, UniversityHerald Reporter

New research suggests that an excise tax on sugar-sweetened drinks would be an effective way to improve the health of heavy consumers.

Researchers at Monash University in Australia found that an excise tax was more effective than a sales tax of similar levels at reducing consumption rates, especially for those who heavily drink sugar-sweetened drinks.

"Although high consumers of sugar-sweetened beverages have the least elastic demand, they drink so much that they are up against household budget limits, and therefore adding tax would bring down their consumption," Dr. Anurag Sharma, lead author of the study, said in a statement. "From that would flow the increased health benefits achieved by a lower sugar intake."

For the study, researchers compared the impact that a 20 percent sales tax and a 20 cents per liter excise tax on beverages such as carbonated non-diet soft drinks, cordials and fruit drinks would have on moderate and high consumers.

"Heavy drinkers are more likely to purchase discounted or multipacks so adding a 20 cents per liter excise tax to these beverages would mean a bigger price increase than a 20 percent sales tax," Sharma said.

Adding the tax to all sugar-sweetened drinks would mean only a small financial burden for those who drank them at low or medium rates.

"Overall, the health benefits could be significant, making these changes very cost-effective," Sharma said.

The findings are published in Health Economics. 

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