In 2018, the British government introduced a tax on soft drinks with a sugar content of more than 50g per litre. The tax isn't particularly onerous, at 18p or 24p (22¢ or 29¢) per litre depending on the sugar content. The industry response was immediate - the majority of drinks were reformulated to reduce their sugar content to below the threshold, which is precisely what the government intended. Although initially controversial, the levy is now regarded as a clear victory for public health, with no significant economic impact on industry.
Even if the purchasing habits of consumers are price-inelastic, the decisions of manufacturers most certainly aren't.
https://www.instituteforgovernment.org.uk/explainer/sugar-ta...
I can’t stand the reformulated sweetened drinks. The flavour profile and aftertaste is completely different. I wasn’t a huge consumer of soft drinks to start with, but now I consume absolutely zero.
They brought out "half-sugar" sodas about 20 years ago (Coke C2), but they hit the market with a thud. I suspect that the recent "Zero Sugar" brands are intended to fill the same spot. Notice how the branding is much closer to the sugared brand than the diet brands, and TBF, they're a lot more comparable taste-wise to the sugared versions than Tab or Diet Coke ever were.
There's little case for introducing these products if it's primarily going to cannibalize their existing brands and consume already limited shelf space, unless there's some long-term appeal in it. But if there's a sugar tax, or some dramatic economic fallout that makes sugar ahistorically expensive, watch as the default position on the vending machine suddenly switches to suddenly Coke Zero.
It matters enough that it determines where things get manufactured though.
> There are two prices for sugar: the price you pay in the U.S., and the price you pay almost everywhere else in the world.
> The price in the U.S. is about 15 cents a pound higher than the price in the rest of the world. That costs Spangler Candy an additional $3 million a year.
> The higher U.S. sugar price is spelled out in U.S. law. You can find it right here, in the latest version of the farm bill, which says the U.S. government shall guarantee a minimum price for sugar that is not to drop below 22.9 cents per pound.
> Because of the higher price here, lots of candies that used to be made in the U.S. — Life Savers, candy canes — are now made overseas.
https://www.npr.org/sections/money/2013/04/26/179087542/the-...
While true, if this was something we really cared about, it's easily solved with tariffs. This is an actual job for tariffs.
> switching to sugar is unlikely to change the consumers buying habits.
If this is the case, why has it not happened yet? The argument "the cost delta is not material enough to matter" comparing corn syrup to sugar, but the evidence based on participant actions leads us to conclude that is not the case.
Edit: @gruez: I agree with regards to consumer demand for the foods in question, I was refuting the point "It's not like sugar is expensive. No more than a few cents worth in a 2L bottle of soda."
I'm not refuting that, I'm only saying that in the context of public health, cheaper corn syrup being subsidized doesn't make a difference when it comes to consumer behavior. That doesn't mean that producers are going to be dumb and buy sugar when corn syrup is so much cheaper. Consumers aren't going to stop drinking coke because it costs 1% more, but the beancounters at coca cola are certainly going to care if they're spending 50% (made up number) more on sweeteners if they don't have to.