Berkeley Sugar Tax Impacts Beer Sales, Not Prices

North Carolina State professor to discuss unintended consequences of soda tax on beer purchases

Mar. 14, 2026 at 4:14am

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Xiaoyong Zheng, a professor of agricultural and resource economics at North Carolina State University, will give a talk on March 25 about the impact of Berkeley, California's sugar-sweetened beverage tax on beer sales and prices. Zheng's research found that the tax reduced beer purchases within Berkeley by 8.9%, but had a negligible effect on beer prices, with the decline in beer sales driven primarily by cross-border shopping rather than an overall reduction in beer consumption.

Why it matters

Berkeley's sugar tax on sodas and other sugary drinks was the first of its kind in the U.S. when implemented in 2015, and its impacts on consumer behavior and the broader beverage market have been closely watched. Zheng's findings suggest the tax had unintended consequences on the beer industry, highlighting how targeted taxes can have ripple effects across related product categories.

The details

Zheng's talk, titled "The Unintended Consequences of Sugar-Sweetened Beverage Taxes on Sales and Prices of Beer Beverages," will examine data from 2014-2015 to analyze the causal effect of Berkeley's sugar tax on beer purchases and prices. Using both synthetic control and difference-in-differences approaches, Zheng found the tax reduced beer purchases within Berkeley by 8.9%, while having a negligible effect on beer prices. The decline in beer sales appears to be driven primarily by consumers crossing city borders to purchase beer outside of Berkeley rather than an overall reduction in beer consumption.

  • The talk will take place at noon on Wednesday, March 25, 2026.
  • Berkeley implemented its sugar-sweetened beverage tax in March 2015.

The players

Xiaoyong Zheng

A professor of agricultural and resource economics at North Carolina State University who will be giving the talk on the unintended consequences of Berkeley's sugar tax on beer sales and prices.

Berkeley, California

The first U.S. jurisdiction to implement an excise tax on sugar-sweetened beverages in March 2015.

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What they’re saying

“Applying both synthetic control and difference-in-differences approaches, we find that the tax reduced beer purchases within Berkeley by 8.9%, while having a negligible effect on beer prices.”

— Xiaoyong Zheng, Professor of agricultural and resource economics

What’s next

The talk is free and open to the public, and is part of a spring seminar series hosted by the Initiative for Energy and Environmental Economics and Policy (EEEPI) at Penn State.

The takeaway

Berkeley's pioneering sugar tax on sodas and other sugary drinks had unintended consequences on the beer industry, reducing in-city beer purchases by nearly 9% while not impacting prices. This highlights how targeted taxes can have broader market impacts beyond their intended targets.