Jamie Oliver sugar tax success: Drop in sugary drinks sales at his Italian chain

17 Oct 2017 --- Introducing a small levy to the price of sugar-sweetened beverages (SSBs) sold in Jamie Oliver’s Italian restaurants across the UK is likely to have contributed to a significant decline in SSB sales, according to new research published in the Journal of Epidemiology & Community Health. The celebrity chef and food campaigner has collated the results of a study that has been running in his 37 Italian restaurants exploring the effects a 10 pence sugar tax had on sales of sugar-sweetened beverages. 

The study – led by the London School of Hygiene & Tropical Medicine with the University of Cambridge – found adding the 10 pence (US$0.13) levy resulted in a decline in sales. After adjusting for general trends in sales it found that adding a 10 pence levy to SSBs sold in 37 Jamie’s Italian restaurants, combined with activities such as re-designing menus, offering new lower sugar drinks and related publicity, was associated with an 11 percent decline in sales of SSBs per customer 12 weeks after the levy was introduced. A decline in sales of 9.3 percent per customer was still observed six months after the levy was introduced. The authors say further research with a longer follow-up is required to assess whether this is sustained. Reductions were greatest in restaurants with higher SSB sales per customer.

In September 2015, Jamie’s Italian added the levy to the price of its non-alcoholic sugar-sweetened drinks, while simultaneously reorganizing the non-alcoholic beverage menu into two sections: sugar-sweetened drinks and “other” beverages which included fresh fruit juices, bottled waters and diet cola. 

The study also found there was a general decrease in the numbers of non-alcoholic beverages sold per customer, with the exception of fruit juice, which increased by 22 percent after six months. Sales of diet cola and bottled waters also declined. 

In addition, fruit spritzers (fruit juice mixed with water) were added to the main non-alcoholic beverage menu which also explained the decision to implement the levy and that proceeds would go directly to the Children’s Health Fund which supports children’s health initiatives.

Using sales data from 37 Jamie’s Italian restaurants, this study explored the effects of these changes on sales of all types of sugar-sweetened beverages (SSBs), 12 weeks and six months after they were implemented. 

After adjusting for general trends in sales, the number of SSBs sold per customer declined by 1 percent at 12 weeks and by 9.3 percent six months after the introduction of the measures. Reductions were greatest in restaurants with higher SSB sales per customers.

“Obesity, type 2 diabetes and cardiovascular disease are among the most pressing global health challenges facing the world today. Evidence suggests that excessive consumption of sugar-sweetened beverages is an important contributor to these potentially life-threatening conditions but we still don’t have a clear answer on how best to encourage people to consume fewer of them,” says Steven Cummins, Professor of Population Health at the London School of Hygiene & Tropical Medicine, who led the study.

“Our study showed that a combination of the levy, menu changes and clearly explaining to customers why it was introduced and that the proceeds would go directly to a worthy cause, looks to have had a relatively large effect on consumer behavior given the small size of the levy. This type of ‘complex intervention’ has also been shown to be successful in economic studies of levies on alcohol,” notes Cummins.

Dr. Laura Cornelsen, Assistant Professor in Public Health Economics and MRC Career Development Fellow at the London School of Hygiene & Tropical Medicine, co-led the study. She says: “This study raises interesting questions about how fiscal interventions may work beyond the effect of the price increase. For example, how big a role did the menu change or the text introducing the levy play? Taxes and levies on sugar-sweetened drinks are regularly framed as health-related measures and such framing might be having an effect of its own, including on both the quantity and the range of beverages sold.”

Professor Mike Rayner, Chair of the Children's Health Fund advisory board welcomed the results: “The original premise of the Children’s Health Fund was that raising money by means of a levy on sugary drinks sold through participating restaurants would reduce consumption and also provide hypothecated funds for children’s health and education initiatives throughout the UK,” he says.

“We are delighted that this independent evaluation confirms that introducing such a levy has led to a significant decline in sales of sugary drinks in participating restaurants and we note the Children’s Health Fund is also beginning to create real, lasting change to the lives of children around the UK through supporting projects to provide them with safe accessible drinking water and healthy food during the holidays,” explains Prof. Rayner. 

The Children's Health Fund is administered by Sustain.

Last week, FoodIngredientsFirst reported how Ireland is proposing to bring in a sugar tax similar to the levy to be introduced in the UK in 2018, amid concerns the country is facing an escalating obesity crisis. 

As the Finance Minister of Ireland, Paschal Donohoe set the country’s 2018 Budget, he announced measures for a new sugar tax of 30 cent per liter on drinks with over eight grams of sugar per 100 milliliters, with a reduced rate of 20 cent per liter on drinks with between five and eight grams of sugar per 100 milliliters.