The demand for non-alcoholic beverages across income groups and implications for sugar-sweetened beverage taxation in Germany

To reduce the intake of added sugars, several countries tax sugar-sweetened beverages (SSBs). In Germany, the potential effects of SSB taxation on demand and consumer welfare are unknown. We estimated the demand for non-alcoholic beverages in Germany across income strata and simulated a 20% added value tax on SSBs and the same tax extended to fruit juice and flavored milk. The demand for SSBs, fruit juice, and flavored milk is elastic, particularly among low- and middle-income households. A tax on SSBs would overall reduce monthly purchases per household by around 2.1 liters but only by 0.9 liters for high-income households. The absolute monthly welfare loss was €0.8 to €1.5 per household and substantially larger among high-income households. However, the relative tax burden was twice as large for low- versus high-income households. While SSB taxation would be regressive, it could reduce health inequalities because low- and middle-income households reduce sugar consumption more.