Does the EU sugar policy reform increase added sugar consumption? An empirical evidence on the soft drink market
Bonnet , Celine (INRA , Auzeville (France). UMR 1291 Groupe de Recherche en Economie Mathématique et Quantitative) | Requillart , Vincent (INRA , Auzeville (France). UMR 1291 Groupe de Recherche en Economie Mathématique et Quantitative)
Whereas National Health authorities recommend a decrease in the consumption of ’added’ sugar, a reform on the Sugar Market will lead to a 36% decrease of the sugar price in the EU. Using French data on soft drinks purchases, this paper investigates the anticipated impact of this reform on the consumption of sugar sweetened beverages. The reform of the EU sugar policy leads to a decrease in regular soft drink prices by 3% and varies across brands. To assess substitution within this food category, we use a random-coefficients logit model that takes into account a large number of differentiated products and heterogeneity in consumers’ behavior. Results suggest that price changes would lead to an increase in market shares of regular products by 7.5% and to substitutions between brands to the benefit of products with the highest sugar content. On the whole, it would raiseconsumption of regular soft drinks by more than 1 liter per person per year and consumption of added sugar by 124 grams per person per year, this increase being larger in households composed of overweight and obese individuals.
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