Sugar Tax To Hit Sugary Cereal Sales

Due to information collected through a new study conducted in the UK, a proposed 20% sugar tax could potentially prohibit consumers from buying the unhealthy, sugary breakfast cereals.

Over one thousand individuals living in the United Kingdom participated in the study. They were given £10 to spend specifically on cereal and sweetened beverages. The researchers classified the products by healthier or less healthy based on their nutritional value.

The participants were asked to complete ten tasks on a supermarket shopping website. Five of the ten tasks were to buy cereals and the other five were to buy drinks sweetened by sugar. They had the option to not buy these items and were free to veer away.

Data reflects that the demand for sugary cereals would drop 48% if the consumers knew a tax was being applied and alternately would purchase healthier cereals. 

Researchers conducting the study observed the impact of a 20% and a 40% tac on sugary cereals and soda beverages with sugar. Researchers also examined whether or not telling the subjects that they were being taxed would influence the way that they shopped for groceries.

Here is what the research shows overall:

  • A 40% tax would reduce the purchasing of both sugary cereals and drinks
  • A 20% tax would reduce the consumption of sugary cereals but not beverages
  • A 20% tax would likely decrease the frequency of purchasing unhealthy items by about 50%

So what are the key takeaways from this study?

  1. A sugar tax will effect consumer markets on any sugary products
  2. Shoppers should be aware of how much they are being taxed for the items they are purchasing
  3. This tax and probably other food taxes will mark an effect on shopping behavior