The impact of a 'soda tax' on prices. Evidence from French micro data

Abstract

Based on a unique database consisting of millions of non-alcoholic beverage price records collected in more than 900 supermarkets in France, we evaluate the impact on prices of the soda tax, an excise on drinks with added sugar or sweetener, introduced in January 2012 in France. We adopt a difference in differences approach and find that the tax was passed-through to consumer prices gradually over the first semester of 2012. After 6 months, there was a full shifting to soda prices while the pass-through to prices of fruit drinks and flavored waters was not complete. Moreover, we find that the impact of this tax was different across retailing groups and brands.