Who bears the costs of the UK soft drink tax? An empirical study of medium-term effects

Wi edu, Lau a
A icle
Who bea s he cos s o he UK so d ink ax? An empi ical
s udy o medium- e m e ec s
Junio Managemen Science (JUMS)
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Managemen Science e. V., Planegg, Vol. 10, Iss. 4, pp. 985-1008,
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Junio Managemen Science 10(4) (2025) 985-1008
Junio Managemen Science
www.jums.academy
ISSN: 2942-1861
Edi o :
DOMINIK VAN AAKEN
Ad iso y Edi o ial Boa d:
FREDERIK AHLEMANN
JAN-PHILIPP AHRENS
THOMAS BAHLINGER
MARKUS BECKMANN
SULEIKA BORT
ROLF BRÜHL
KATRIN BURMEISTER-LAMP
CATHERINE CLEOPHAS
NILS CRASSELT
BENEDIKT DOWNAR
KERSTIN FEHRE
MATTHIAS FINK
DAVID FLORYSIAK
GUNTHER FRIEDL
MARTIN FRIESL
FRANZ FUERST
WOLFGANG GÜTTEL
NINA KATRIN HANSEN
ANNE KATARINA HEIDER
CHRISTIAN HOFMANN
SVEN HÖRNER
STEPHAN KAISER
NADINE KAMMERLANDER
ALFRED KIESER
ALEKSANDRA KLEIN
NATALIA KLIEWER
DODO ZU KNYPHAUSEN-AUFSESS
SABINE T. KÖSZEGI
ARJAN KOZICA
CHRISTIAN KOZIOL
MARTIN KREEB
WERNER KUNZ
HANS-ULRICH KÜPPER
MICHAEL MEYER
JÜRGEN MÜHLBACHER
GORDON MÜLLER-SEITZ
J. PETER MURMANN
ANDREAS OSTERMAIER
BURKHARD PEDELL
ARTHUR POSCH
MARCEL PROKOPCZUK
TANJA RABL
SASCHA RAITHEL
NICOLE RATZINGER-SAKEL
ASTRID REICHEL
KATJA ROST
THOMAS RUSSACK
FLORIAN SAHLING
MARKO SARSTEDT
ANDREAS G. SCHERER
STEFAN SCHMID
UTE SCHMIEL
CHRISTIAN SCHMITZ
MARTIN SCHNEIDER
MARKUS SCHOLZ
LARS SCHWEIZER
DAVID SEIDL
THORSTEN SELLHORN
STEFAN SEURING
VIOLETTA SPLITTER
ANDREAS SUCHANEK
TILL TALAULICAR
ANN TANK
ANJA TUSCHKE
MATTHIAS UHL
CHRISTINE VALLASTER
PATRICK VELTE
CHRISTIAN VÖGTLIN
BARBARA E. WEISSENBERGER
ISABELL M. WELPE
HANNES WINNER
THOMAS WRONA
THOMAS ZWICK
Volume 10, Issue 4, Decembe 2025
JUNIOR
MANAGEMENT
SCIENCE
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and In e nal Con ol Sys ems: An Empi ical
Assessmen o ESG Repo ing o Ge man DAX40 Fi ms
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Disclosu e and I s E ec on Sha eholde Beha io
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(GNAT) - An Empi ical In es iga ion o he Con e gen
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An Empi ical S udy o Medium-Te m E ec s
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Accep ance o Gene a i e AI in he Wo kplace -The
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and In e ac ion F equency
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Who Bea s he Cos s o he UK So D ink Tax?
An Empi ical S udy o Medium-Te m E ec s
Lau a Wi edu
Pade bo n Uni e si y
Abs ac
Using i e yea s pos - ax da a on CPI p ices, na ional employmen as well as i m-le el employmen , we p o ide no el e idence
on he medium- e m e ec s o he UK So D inks Indus y Le y (SDIL). Applying a di e ence-in-di e ences esea ch design,
we ind ha nei he consume s no employees isibly bo e he cos s o he ax. Howe e , gi en he alling end in be e age
p ices in he UK, consume s aced a 6% less decline in so d ink p ices compa ed o p ices o le y-exemp be e ages, since
he in oduc ion o he ax. Employees in he so d ink manu ac u ing indus y we e una ec ed by he ax, whils employees
in he be e age manu ac u ing indus y e en bene i ed om i h ough signi ican employmen inc eases. Ou s udy o e s
policy ad ice o o he coun ies which a e ye o implemen so d ink axes. We ad oca e he implemen a ion o ie ed ax
designs, such as in he UK, due o i s posi i e impac on employmen and minimal bu den o consume s.
Keywo ds: public heal h policy; so d ink axa ion; UK suga ax
1. In oduc ion
Inc easing heal h conce ns, such as obesi y and he asso-
cia ed non-communicable diseases (NCDs)1, ha e u ged go -
e nmen s wo ldwide o add ess he excess suga in ake o he
popula ion (Wo ld Heal h O ganiza ion, 2023a). He eby, he
UK is one o he coun ies su e ing he mos om his heal h
issue, ha ing he hi d highes obesi y a e in Eu ope in 2016,
succeeding Mal a and Tu key (Me cal e & Sasse, 2023). By
2016, i was ine i able o he UK go e nmen o encoun e
his adiposi y epidemic, wi h an obesi y a e s iking nea ly
30% (Me cal e & Sasse, 2023).2Consequen ly, he UK So
I would like o exp ess my since e app ecia ion o my supe iso , D . Hen-
ning Giese, whose in aluable inpu and con inuous suppo made his
publica ion possible. My deepes g a i ude also goes o my amily, iends
and ( o me ) manage s, wi hou whom I would no be whe e I am oday.
Thei unwa e ing suppo and us ga e me he cou age o pu sue and
achie e my academic goals.
1Non-communicable diseases a e ch onic diseases, such as ca dio ascula
heal h issues (e.g. s okes), diabe es, cance e c. They accoun o 74%
o wo ldwide dea hs (Wo ld Heal h O ganiza ion, 2023b).
2As shown in Figu e 2 in Me cal e and Sasse (2023).
D inks Indus y Le y (SDIL)3was implemen ed in Ap il 2018
(HM Re enue & Cus oms, 2024a). I s wo- ie ed policy de-
sign aims a encou aging manu ac u e s o educe he suga
con en o hei be e age po olio h ough e o mula ion
(HM Re enue & Cus oms, 2024a); he less suga is added
o a d ink he lowe he ax bu den. Howe e , as p e alen
o excise axes, p oduce s o en shi he ex a cos s a ising
h ough he ax on o o he s akeholde g oups o main ain
p e- ax p o i s. Conside ing ha he UK so d ink ax is a
p oduce -imposed ax, i is no in ended o be passed down
o consume s (e.g. in he o m o highe p oduc p ices) o
employees (e.g. job cu s). Thus, o unde s and he e ec-
i eness o he UK so d ink ax, i is i al o i s ques ion
“Who bea s he cos s o he UK so d ink ax?”. To iden-
i y which pa y ca ied he ax bu den I pe o m di e ence-
in-di e ences analyses using i m-le el and na ional employ-
men da a, as well as p oduc p ice da a on so d ink p ices.
I ind ha nei he employees no consume s isibly bea he
ax bu den. Howe e , he ax in oduc ion decele a ed he
3Fo simpli ied comp ehension, I he ea e speak o he UK so d ink ax
in lieu o he UK So D inks Indus y Le y.
DOI: h ps://doi.o g/10.5282/jums/ 10i4pp985-1008
© The Au ho (s) 2025. Published by Junio Managemen Science.
This is an Open Access a icle dis ibu ed unde he e ms o he CC-BY-4.0
(A ibu ion 4.0 In e na ional). Open Access unding p o ided by ZBW.
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008986
gene al end o alling so d ink p ices in he UK. By using
medium- e m da a, my s udy cap u es e ec s which ha e no
been ma e ialised in o he p e ious sho - e m s udies on em-
ploymen and p ices.
This pape is s uc u ed as ollows. Chap e 2ou lines he
ins i u ional se ing o he UK so d ink ax and o e s an ex-
ensi e li e a u e e iew on so d ink axa ion. In Chap e 3,
I ou line my empi ical s a egy and desc ibe he da a. Chap-
e 4elabo a es on he empi ical esul s. Robus ness checks
a e p esen ed in Chap e 5. Las ly, Chap e 6concludes, sum-
ma ises limi a ions and o e s an ou look on u u e esea ch.
2. Theo e ical Backg ound
2.1. Ins i u ional Se ing
Excise axes ha e become a a ou able ool o nudge he
popula ion’s consump ion pa e n in o a ce ain di ec ion.
O en e e ed o as “sin axes”, hey a e le ied on he con-
sump ion o goods which a e associa ed wi h (high) u u e
cos s o socie y (Allco e al., 2019; de la Fe ia, 2024).
Fo example, he in ake o obacco and alcohol o he use
o uel o en come a he cos o he en i onmen o a pe -
son’s heal h. By axing hese ypes o p oduc s, hei p ices
inc ease, leading o a decline in demand and he ewi h limi -
ing hei nega i e impac s (de la Fe ia, 2024).
Nowadays, excise axes a e o en le ied on suga -swee ened
be e ages (SSBs),4in o de o cu b he popula ion’s ex-
cess suga in ake. While he WHO’s ecommenda ion on an
adul ’s daily suga consump ion is 50 g, a egula 600 ml so
d ink bo le5al eady exceeds his h eshold (Wo ld Bank,
2020). Hence, wo ldwide obesi y le els ha e been con inu-
ously ising since mo e han ou decades (Me cal e & Sasse,
2023), making excise axes on suga y d inks ine i able nowa-
days. Acco ding o he Wo ld Heal h O ganiza ion (2023a),
mo e han 108 coun ies ha e adop ed suga -swee ened be -
e age axes as a July 2022. Whils he UK is one o he Eu o-
pean coun ies mos a ec ed by high obesi y a es (Me cal e
& Sasse, 2023), i is also one o he mos ecen coun ies in
Eu ope o ha e adop ed a ax on suga -swee ened be e ages
(see Wo ld Bank, 2020, Appendix 1).
Thus, he UK So D inks Indus y Le y, a na ional ax on
suga -swee ened be e ages, was announced in Ma ch 2016
and implemen ed in Ap il 2018 (HM Re enue & Cus oms,
2024a). The excise ax is imposed on so d ink p oduce s
and impo e s and comp ises all ypes o so d inks wi h
mo e han 5 g o added suga pe 100 ml. Alcoholic d inks
wi h mo e han 1.2% alcohol con en , milk p oduc s, as well
as ui and ege able juices a e exemp om he le y (HM
Re enue & Cus oms, 2024a). A ie ed olume-based ax a e
is applied o mo i a e p oduce s o educe he suga con en
o hei be e ages by e o mula ing hem. The wo ie s a e
4SSBs a e d inks which con ain ee suga s (i.e. added suga s and suga s
na u ally inhe en in ui juices and concen a es, sy ups and honey)
(Wo ld Heal h O ganiza ion, 2023a).
5A 600 ml so d ink bo le app oxima ely con ains 64 g o suga acco ding
o he Wo ld Bank’s (2020) example.
de ined as ollows: 18 pence pe li e o be e ages wi h a
suga con en be ween 5 g o 8 g pe 100 ml; 24 pence pe
li e o be e ages wi h mo e han 8 g suga pe 100 ml (HM
Re enue & Cus oms, 2024a). In Ap il 2023, he ax was ex-
ended o also encompass concen a es wi h mo e han 5 g
suga pe 100 ml. All concen a es a e axed a he highe
a e o 24 pence pe li e (HM Re enue & Cus oms, 2024b).
Whils a common consensus has e ealed ha suga -
swee ened be e age axes can success ully educe suga
consump ion and he ewi h imp o e public heal h (Wo ld
Bank, 2020), he es ima ed le el o impac a ies signi i-
can ly ac oss s udies and coun ies. This can be pa ially
a ibu ed o he di e en policy designs and h ough which
channels hey a e passed h ough. Whils uni o m axes
aim a cu ing consump ion le els h ough highe p oduc
p ices o consume s, ie ed ax designs ocus on educing
o e all suga le els in be e ages h ough p oduc e o mula-
ion on he manu ac u e ’s side (Wo ld Heal h O ganiza ion,
2023a). Despi e mos coun ies applying uni o m ax a es
(e.g. a single ax a e on all suga y p oduc s), he UK go -
e nmen decided o in oduce a ie ed ax a e o dec ease
he suga con en in so d inks ins ead o jus a ge ing
consump ion h ough p ices. Thus, i s p ima y objec i e is
o incen i ise so d ink manu ac u e s o e o mula e hei
p oduc s and o in oduce low-suga al e na i es in hei
p oduc po olio in o de o e ade he ax (HM Re enue &
Cus oms, 2016). The e o e, he UK go e nmen p o ided
manu ac u e s wi h a wo-yea lead ime o imp o e hei
suga -swee ened be e age po olio be o ehand. Hence, he
change should al eady ake place on he manu ac u ing side
ins ead o jus ans e ing he ax bu den on o he consume .
As obesi y le els kep on inc easing (Me cal e & Sasse,
2023), despi e he in oduc ion o he so d ink ax, he
B i ish go e nmen was o ced o u he in e ene in he
popula ion’s die choices. Hence, in Ap il 2022, he go e n-
men implemen ed a compulso y calo ie labelling law. All
es au an s and o he businesses (e.g. online deli e ies) o -
e ing non-p epacked ood (i.e. se ed meals) a e obliged
o display calo ie in o ma ion on hei menu (Depa men o
Heal h and Social Ca e, 2022). I assume ha his law could
a ec employmen le els in he so d ink indus y in a nega-
i e way due o i s signalling e ec . Consume s migh e ain
om pu chasing so d inks in a es au an o ca e, once hey
a e eminded o he high amoun o calo ies on he menu;
he ax signals he cus ome how unheal hy he be e age is.
Thus, SSB consump ion migh dec ease in es au an s, lead-
ing o an o e all lowe demand o so d ink manu ac u ing.
This con inuous decline in demand could e en ually lead o
job losses in he espec i e indus y. Howe e , I a gue ha
his law is unlikely o dis o my esul s, as i s in oduc ion
only o e laps wi h my da a by one yea (i.e. in 2023). I also
pe o m a obus ness check, in which he o e lapping yea is
excluded, and ind ha my esul s emain obus (see Chap-
e 6).
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008 987
2.2. Li e a u e Re iew
Excise axes en ail addi ional cos s o so d ink i ms and
could jeopa dise hei p o i s. Thus, i ms o en end o pass
he ax bu den on o o he s akeholde g oups, such as em-
ployees (e.g. educ ions in s a ing) o consume s (e.g. in-
c eases in p ices). He eby, cu en li e a u e ex ensi ely anal-
yses p ice e ec s, as mos suga -swee ened be e age axes
a e ansmi ed h ough his channel. E ec s on employmen
emain an unde s udied a ea. Due o he no el y o mos so
d ink axes, he as majo i y o empi ical s udies a e only
able o cap u e he sho - e m e ec s o SSB axa ion. Whils
his migh be he case o p ice e ec s, I expec s uc u al
changes in employmen o ake longe o ma e ialise.
Fo example, Sca bo ough e al. (2020) analyse he sho -
e m e ec s on p ices e oked by he UK so d ink ax. They
conduc an in e up ed ime se ies analysis, using mo e han
210,000 obse a ions on so d ink suga con en and p ices.
P ima ily, hey di ide he sample in o own b anded p oduc s
om he supe ma ke chain and amous b anded p oduc s,
as well as low-le y p oduc s, which ha e a suga con en be-
ween 5 g o 8 g pe 100 ml and high-le y be e ages wi h
a suga con en o 8g pe 100 ml o abo e. Fi s ly, hey dis-
co e a educ ion o he suga con en o bo h, “no name”
and b anded suga -swee ened be e ages. Secondly, hey ind
ha p ices inc eased by 11.8 pence pe li e o b anded p od-
uc s om he highe le y ie , passing h ough app oxima ely
hal o he ax. Su p isingly, he p ices o he b anded lowe
axed be e ages dec eased by 17.4 pence pe li e. Fo own
b anded d inks he opposi e e ec occu ed. P ices o highe
axed d inks dec eased by 63 pence pe li e whe eas p ices
o lowe axed p oduc s inc eased by 69 pence pe li e (Sca -
bo ough e al., 2020).
Clea e indus y esponses ha e been obse ed in he
Mexican and Chilean suga swee ened be e age ma ke s,
a e he implemen a ion and inc eases o hei na ional so
d ink axes. Cuad ado e al. (2020) conduc a ime se ies
analysis o eg ess he inc ease o he Chilean so d ink ax
in 2014 on so d ink p ices. Thei analysis is based on con-
sume p ice da a wo yea s pos ax implemen a ion. The
au ho s es ima e a 5.6% p ice inc ease o ca bona ed be e -
ages, which is equi alen o a 140% pass- h ough o he ax.
P ices o un axed be e ages, such as juices, we e una ec ed.
Con a y o he UK so d ink ax, he Chilean SSB ax was
a consume -imposed ax, aiming o educe he a o dabili y
o so d inks and o s imula e heal hie subs i u ion e ec s.
As o ha , he inc ease in so d ink p ices has been he
main in en ion o he Chilean so d ink ax policy, which
can he e o e be iewed as ui ul. In he case o Mexico,
Aguila e al. (2021) also iden i y a signi ican posi i e e -
ec o he na ional SSB ax on p ices o axed be e ages.
Using household pu chase da a om Kan a Wo ld Panel,
hey conduc an e en s udy. The au ho s es ima e a 9.7%
p ice inc ease o axed so d inks and a pass h ough a e on
p ices o 80%. He ewi h, bo h ax designs exceed he WHO’s
ecommenda ion on a minimal pass- h ough a e o 20% o
SSB axes o e ec i ely educe consump ion (Wo ld Bank,
2020).
Ano he majo s udy s ems om S acey e al. (2019), who
analyse p ice e ec s in he ame o he Sou h A ican SSB
ax. The au ho s use Consume P ice Index (CPI) da a o
pe o m a be o e and a e compa ison one yea pos ax.
They ind ha p ices o ca bona ed be e ages inc eased sig-
ni ican ly, holding a pass- h ough a e o app oxima ely 70%.
Simila e idence on p ices is also p o ided o he Saudi A a-
bian suga -swee ened be e age ax. Alsukai e al. (2020)
also use CPI p ice da a o de i e he p ice e ec s one yea
a e Saudi A abia’s so d ink ax in oduc ion. Thei di -
e ence in di e ences analysis es ima es signi ican p ice in-
c eases o 55% o ca bona ed be e ages (which ela es o a
pass- h ough a e o 110%), compa ed o un axed be e age
p ices.
As men ioned abo e, mos analyses ocus on he con-
sume ax incidence o suga swee ened be e age policies.
Howe e , excise axes can also be shi ed on o employees, by
dec easing wages o educing he numbe o employees o
main ain p e- ax p o i s. Mos commonly, opponen s o he
ax a gue ha he UK so d ink ax leads o majo job losses
(Laube e al., 2022) o a educ ion in wo king hou s (Caw-
ley & F is old, 2023). They assume ha he decline in so
d ink demand ha ms he i m’s economic pe o mance and
e en ually leads o s a cu s (Ha e sley e al., 2020). How-
e e , p e ailing li e a u e on employmen does no alida e
hese claims.
One o he main s udies in his ield s ems om Ma inello,
Leide , Pugach, and Powell (2021), which analyses he e ec
o SSB axes on employmen in he US s a e Philadelphia.
The au ho s conduc a p e-pos analysis, based on employ-
men da a om he Bu eau o Labo S a is ics. O e all, hey
do no ind a signi ican e ec o he ax on he numbe o
employees in he p i a e sec o . Simila ly, Díaz e al. (2023)
pe o m an in e up ed ime se ies analysis, using employ-
men da a om he Minis y o Labou in Pe u. As hey ex-
plo e he e ec s o he na ional so d ink ax, hey do no
obse e signi ican impac s on wage and employmen le -
els in he be e age manu ac u ing sec o (Díaz e al., 2023).
Ano he s udy ocussing on employmen changes in he be -
e age manu ac u ing sec o o igina es om Gue e o-López
e al. (2017). Using mon hly su ey da a on he so d ink
and non-alcoholic be e age manu ac u ing indus ies, hey
ind ha he Mexican so d ink ax had no signi ican e ec
on employmen in he espec i e indus ies. Fu he mo e,
Gonçal es e al. (2024) p o ide ecen e idence on employ-
men e ec s in he se ing o Po ugal. As he Po uguese
soda ax was implemen ed in 2017 and pa ially inc eased
in 2019, he au ho s employ an e en s udy design o de-
i e sho - and medium- e m e ec s o he ax. They e ie e
wage and employmen da a om annual ax decla a ions,
co e ing a pe iod om 2017 o 2019. The au ho s ind ha
nei he wages no employmen le els in SSB companies we e
a ec ed.
Gi en he no el y o he UK so d ink ax, li e a u e on i s
ax incidence is s ill qui e sca ce. While mos s udies on SSB
axes in o he geog aphical se ings imply p ice inc eases and
no e ec on employmen , his migh no be he case o he
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008988
UK due o i s di e en policy design. Compa ed o o he so
d ink axes, which aim a inc easing p ices o educe con-
sump ion o suga y d inks, he B i ish so d ink ax is no
in ended o be le ied on consume s. Fo he ax o mee i s
p ima y a ge o educing he popula ion’s suga in ake and
he ewi h obesi y le els, he suga le els in so d inks mus
be subs an ially dec eased. This is unde lined by he pape
o B iggs e al. (2017), who a gue ha p oduc e o mula-
ion has he g ea es e ec on he popula ion’s heal h in he
UK. The au ho s conduc se e al modelling s udies o quan-
i y po en ial indus y esponses o he so d ink ax. They
ind ha educing he suga con en in d inks, by e o mula -
ing p oduc s, would ha e he g ea es e ec on public heal h.
Howe e , he e ec pa ially diminishes i he indus y de-
cides o pass he ax on o he consume , i.e. in he o m o
highe p oduc p ices (B iggs e al., 2017).
Hence, o analyse he e ec i eness o he UK so d ink
ax, i is i al o i s ques ion “Who bea s he cos s o he UK
so d ink ax?”. My esea ch ques ion he ewi h explici ly
aims o iden i y whe he he ax bu den is bo ne by he com-
pany o shi ed on o consume s o he i ms’ employees.6The
impo ance o iden i ying he incidence o he UK so d ink
ax lies in he main objec i e o he ax. I was implemen ed
o comba he UK’s heal h pandemic o obesi y by educing
suga le els in d inks and he ewi h he o e all suga in ake
o he popula ion (HM Re enue & Cus oms, 2016). Thus, i
is in ended o be p ima ily le ied on he manu ac u e side,
o s imula e e o mula ion e o s h ough i s wo- ie ed de-
sign (Sca bo ough e al., 2020). I passed on o consume s,
in he o m o highe p oduc p ices, he policy is less e ec-
i e (B iggs e al., 2017). As e o mula ion can be cos ly and
ime in ensi e, manu ac u e s migh no be necessa ily en-
cou aged o educe he suga con en o hei p oduc s and
ha e he op ion o ake he simple app oach o passing he
ax down o consume s. A change in consume choice, how-
e e , o pu chase less suga y d inks, seems mo e di icul . No
ha ing he op ion in he i s place o pu chasing so much
suga in so d inks, as o e all suga le els ha e been e-
duced, seems mo e p omising.
Thus, my app oach ocusses on iden i ying he incidence
o he UK so d ink ax, as unde s anding indus y eac ions
o he ax is essen ial o de e mine i s e iciency (Wo ld Bank,
2020). Whils a pass h ough o he ax on o consume s s ill
has a posi i e, bu educed impac on he popula ion’s heal h
(B iggs e al., 2017), I a gue ha a pass h ough on o employ-
ees does no a ec public heal h a all and only bea s nega-
i e consequences o socie y (e.g. less employmen , lowe
wages). I pos ula e ha companies can eac in one o he
ollowing h ee ways o he ax. The i s and mos common
op ion is o pass he ax on o consume s, by aising p od-
uc p ices. Ano he op ion o so d ink manu ac u e s is o
6I assume ha sha eholde s will no signi ican ly be impac ed by he UK
so d ink ax. This is because hey eac ex emely sensi i e o di idend
pay-cu s, whe e o e i ms usually a oid his measu e (Heiden, 2002) and
only use i as a las eso . Thus, I a gue ha i is e y unlikely ha he
so d ink ax bu den is a alid eason o so d ink companies o educe
di idend payou s.
pass he ax bu den on o hei employees, by ei he educ-
ing cu en s a o no inc easing wages app op ia ely. This
app oach could be aken i i ms wan o a oid aising p ices
in o de o emain compe i i e wi h o he be e age manu-
ac u e s (e.g. juice manu ac u e s, which a e no a ec ed
by he ax). Las ly, i ms could a oid passing he ax bu den
on o o he s akeholde s due o ma ke compe i i eness and
company epu a ion (e.g. educing s a could s imula e neg-
a i e publici y), bu also ci cum en he ax bu den i hey e-
o mula e hei so d inks o all below he suga h eshold.
This esponse would be he UK go e nmen ’s p e e ed eac-
ion o he ax, because e o mula ion leads o o e all lowe
suga le els in so d inks. Hence, o iden i y how he B i ish
so d ink manu ac u ing indus y eac ed o he ax and who
now bea s he consequences o i (i.e. he ax bu den), I pos-
ula e he subsequen hypo heses:
H1: The UK so d ink ax leads o a dec ease in
employmen in he so d ink manu ac u ing in-
dus y.
H2: The UK so d ink ax leads o an inc ease in
p ices o so d inks.
The i s hypo hesis aims o iden i y i consume s bea
he cos o he ax due o ising so d ink p ices. As elab-
o a ed abo e, he simples app oach o manu ac u e s o
a oid he ax bu den is o solely inc ease so d ink p ices.
In line wi h Cawley and F is old (2023), I a gue ha he
pass h ough o he ax highly depends on he elas ici y o
demand and supply7in a pe ec ly compe i i e ma ke . I
demand is inelas ic, as he e a e no al e na i e p oduc s o
he axed so d inks (i.e. no eplacemen p oduc ) and con-
sume s a e highly dependen on he good, he indus y can
ully pass he ax bu den on o consume s (100% p ice pass
h ough). Thus, despi e he p ice inc eases, demand o so
d ink p oduc s will no decline due o he consume s’ depen-
dency on ha speci ic p oduc . Howe e , in he scena io o
pe ec ly elas ic demand, meaning he e a e many subs i u e
p oduc s o he axed so d inks on he ma ke , he consume
will op o mo e cos -e icien al e na i es, i p ices o SSBs
a e inc eased. Thus, i ms will e ain om aising p ices and
will ully abso b he ax bu den (0% p ice pass h ough) o
e en o e p ice educ ions, in o de o s ay compe i i e in he
ma ke . In line wi h Cawley and F is old (2023), I assume
ha he indus y esponse will be somewhe e in be ween he
i s scena io o ully passing he ax on o consume s and he
second scena io o o ally abso bing he ax bu den. Simi-
la ly, he eac ion o cu ing s a (Hypo hesis 2) seems in-
ui i e, as inc easing so d ink p ices leads o a lowe de-
mand o he p oduc . This leads o a decline in so d ink
manu ac u ing and hus, e en ually educes he numbe o
7Elas ici y o supply e e s o he change o p oduc supply due o a p ice
inc ease. The change in he demand o a p oduc (e.g. highe o lowe
consump ion o i ) due o p ice inc eases/dec eases is known as he elas-
ici y o demand (Wo ld Bank, 2020).

L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008 989
jobs in he so d ink manu ac u ing indus y (Ha e sley e
al., 2020). This has been a ypical a gumen pu o wa d by
he opposi ion o global so d ink axes (Ha e sley e al.,
2020), which I deem o be plausible o he UK so d ink ax
oo. Al e na i ely, a possible coun e a gumen o my second
hypo hesis is ha consume s migh subs i u e he now mo e
expensi e so d inks wi h un axed be e ages such as low-
calo ie d inks o wa e (Wo ld Bank, 2020). Since so d ink
manu ac u e s o en p oduce a wide ange o be e ages (e.g.
Coca-Cola also p oduces le y-exemp p oduc s such as wa e
and juices), he subs i u ion o p oduc s does no necessa ily
esul in any employmen losses. Ra he , so d ink manu ac-
u e s migh e en equi e addi ional labou o e o mula ion
and inno a ion o new low-suga al e na i es.
As o my knowledge, he e has been no o he empi ical
s udy explici ly analysing he UK so d ink ax e ec s on em-
ploymen . As he ew s udies on he UK so d ink ax p ice e -
ec s p o ide wo old e idence, my analysis o e s addi ional
insigh s in his ield. By e alua ing employmen and p ice e -
ec s wi hin a medium- e m ho izon, my s udy accoun s o
s uc u al changes ha ake longe o mani es in he ma ke
(e.g. s uc u al shi s in employmen and long- e m mani-
es ed p icing s a egies).
3. Empi ical Me hod
3.1. Model and Me hodology
To answe my esea ch ques ion o who bea s he cos s
o he UK so d ink ax, I ake h ee di e en app oaches.
Fi s , I examine employmen om a mic oeconomic scope,
using i m-le el da a. Then I analyse he e ec on a mac oe-
conomic le el, using na ional agg ega e employmen da a o
he be e age and so d ink manu ac u ing indus ies. Fi-
nally, I es ima e p ice e ec s using p oduc p ice da a o so
d inks. I use wo di e en employmen app oaches o mo e
obus esul s. While he mic oeconomic da a encompasses
he mos meaning ul companies in he so d ink indus y
based on hei ma ke capi alisa ion and de ined by The Re-
ini i Business Da a Classi ica ion, he mac oeconomic em-
ploymen analyses include andomly selec ed so d ink man-
u ac u e s ega dless o hei size. See Sec ion 3.2 o a de-
ailed desc ip ion o he da a, including i s limi a ions.
I apply he same econome ic amewo k o all analyses,
namely di e ence-in-di e ences (DiD). This esea ch design
is common in policy analysis, as i compa es he di e en ou -
comes o a ea men and con ol (compa ison) g oup o e
ime (i.e. be o e and a e a new policy in e en ion) (Ma -
cus & San ’Anna, 2021). Fo DiD o iden i y he ac ual causal
e ec o he policy, he ollowing p e equisi e mus be ul-
illed. The ea men g oup should ha e de eloped in a simi-
la way as he con ol g oup i no policy ( ea men ) had been
implemen ed. This is also e e ed o as he pa allel ends
assump ion (Ang is & Pischke, 2009; Ma cus & San ’Anna,
2021). Pu in o he wo ds, bo h g oups mus ha e he same
p e-in e en ion employmen /p ice ends. To es his as-
sump ion, I make g aphical compa isons and conduc e en
s udies. E en s udies a e commonly used o assessing he
pa allel ends assump ion, as hey o e a mo e g anula
iew on he ea men e ec (Ma cus & San ’Anna, 2021).
Compa ed o DiD, which analyses he a e age change in ou -
comes (be ween ea men and con ol g oup) be o e and a -
e he e en , e en s udies look a he e ec o he ea men
a each speci ic pe iod.
To es ima e he causal e ec o he so d ink ax on em-
ploymen and p ice le els, I pe o m high-dimensional ixed
e ec s eg essions o all h ee speci ica ions. Fixed-e ec s
models accoun o unobse ed a iables, which a e con-
s an o e ime bu di e ac oss g oups and he ewi h may
a ec he endogenous a iable (Ang is & Pischke, 2009;
Woold idge, 2021). Fo example, he loca ion o a company
could in luence he a ailabili y o labou due o he in as-
uc u e and economic condi ions in ha a ea. My ixed
e ec s eg ession model con ols o his possible a ia ion
wi hin uni s. As s a ed by Lee (2016), he ixed e ec s es i-
ma o is he p e e ed es ima o o di e ence in di e ences
models.
3.1.1. Mic oeconomic Employmen Analysis
To es my i s hypo hesis, ha is, whe he he UK
so d ink ax leads o a decline in employmen in he UK
so d ink manu ac u ing indus y, I es ima e he ollowing
model:
Log(Emplo yees)i; =β0+β1·Tax
+β2·T ea men i
+β3·(Tax ∗T ea men i)
+βk·Xi; +Yi; −1+γp+ϵi;
(1)
My dependen a iable, Log(Emplo yees)i; e lec s he
loga i hmic numbe o employees in each company (i) pe
yea ( ). The a iable T ea men iis an indica o a iable,
aking he alue one i a company is ope a ing in he so
d ink indus y and ze o i companies a e alcoholic be e -
age p oduce s. Tax is a bina y a iable, which is equal o
ze o o pe iods be o e he so d ink ax came in o e ec
(2013-2017) and equal o one o yea s a e he ax (2018
– 2023). My key a iable o in e es is he in e ac ion e m
Tax ∗T ea men i. I is also e e ed o as he ea men
indica o , which akes he alue o one i a uni is ea ed
and si ua ed in a pe iod a e he ax in e en ion. O he -
wise, i akes he alue o ze o. I s coe icien β3, also known
as di e ence-in-di e ences es ima o , cap u es he causal e -
ec o he UK so d ink ax on employmen . As I use a log-
linea speci ica ion, he coe icien es ima es he di e ence
in employmen changes be ween so d ink i ms and alco-
hol p oducing i ms be o e and a e he ax in e en ion. To
con ol o possible con ounde s, he Unemplo ymen Ra e,
GDP and To al Popula ion a e cap u ed in he e m Xi; .
I belie e ha hese common mac oeconomic indica o s a e
likely o in luence cu en employmen le els in he so d ink
manu ac u ing indus y. Fu he mo e, I also con ol o com-
pany ixed e ec s (γp), such as he company’s loca ion o
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008990
example. All o he po en ial con ounde s a e encompassed
in he e o e m ϵi; .
Fu he mo e, my model also accoun s o au oco ela ion
by including he i s lag o he dependen a iable (Yi; −1).
Au oco ela ion exis s when he e o e m co ela es ac oss
di e en ime pe iods (Do an e al., 2017). In speci ic, when
a a iable can be de ined by i s p e ious yea ’s alue, his is
called an au o eg essi e p ocess (Das, 2019).8Pu in o he
wo ds, I a gue ha he numbe o employees is s ongly in-
luenced by he numbe o employees in he p eceding yea .9
This could be caused by a company’s hi ing pa e ns o i s
economic g ow h o e he pas yea s. As I use annual da a,
i is su icien o only con ol o he i s lag (Do an e al.,
2017).
Mo eo e , di e ence-in-di e ences models a e o en
p one o clus e p oblems (Lee, 2016). This happens when
e o e ms a e co ela ed wi hin a g oup (e.g. company)
o ac oss ime pe iods (Imbens & Woold idge, 2009). Fo
example, companies o en adap hei i m-speci ic hi ing
policies, which in luences hei numbe o employees o e
ime. I con ol o his possible con ounde by using clus e -
obus s anda d e o s,10 as sugges ed by Came on and Mille
(2015). In line wi h Gonçal es e al. (2024), I he e o e clus-
e a he company le el.
3.1.2. Mac oeconomic Employmen Analyses
In addi ion o he mic oeconomic analysis (i.e. i m-
le el employmen ), I pe o m wo mac oeconomic analyses
(i.e. agg ega e employmen ) o mo e obus esul s. I i s
eg ess he so d ink ax on employmen in he so d ink
manu ac u ing indus y and a e wa ds on employmen in
he en i e be e age manu ac u ing indus y. Thus, I es ima e
he subsequen eg ession model o de i e he mac oeco-
nomic employmen e ec s e oked by he UK so d ink ax:
Log(Emplo yees)i; =β0+β1·Tax
+β2·T ea men i
+β3·(Tax ∗T ea men i)
+βk·Xi; +Yi; −1+ϕq+ϵi;
(2)
The dependen a iable Log(Emplo yees)i; e lec s ei-
he he loga i hmic numbe o employees in he be e age
manu ac u ing indus y o in he so d ink manu ac u ing
indus y. Equi alen o Equa ion (1), he e m Xi; comp ises
he Unemplo ymen Ra e,GDP and To al Popula ion.
8When he a iable is only in luenced by i s las yea ’s alue, his is e e ed
o as an au o eg essi e p ocess o o de one o jus AR(1) (Das, 2019).
9I pe o m he Woold idge es o se ial co ela ion and ind ha my
model su e s om au oco ela ion issues. Fu he mo e, I also pe o m
he B eusch-God ey es o au oco ela ion, which es s i au o eg essi e
p ocesses la ge han AR(1) ( i s lag) a e p esen in he model (Do an
e al., 2017). The es s a is ic indica es ha my model does no su e
om au oco ela ion beyond he i s au o eg essi e p ocess (AR(1)).
10 Clus e - obus s anda d e o s con ol o bo h, clus e p oblems and o
he e oskedas ici y (Came on & Mille , 2015).
Again, Yi; −1deno es he lagged dependen a iable11 and
ϵi; he e o e m. I u he con ol o indus y-speci ic ixed
e ec s (ϕq).
Fu he mo e, I use he e oskedas ici y- obus s anda d e -
o s, bu do no clus e a g oup le els due o an insu icien
numbe o clus e s. No add essing possible clus e issues
wi hin he model could lead o an unde es ima ion o s an-
da d e o s (Lee, 2016). Howe e , i he numbe o clus e s
is oo small, his could also lead o unde es ima ed s anda d
e o s (Came on & Mille , 2015; Cawley & F is old, 2017).
While Came on and Mille (2015) pos ula e ha mo e clus-
e s lead o be e s a is ical in e ence, hei example unde -
lines ha ewe han 10 clus e s esul in ex emely high e-
jec ion a es o he null hypo hesis. I he e o e e ain om
using only wo indus y clus e s. Thus, eg ession esul s
should be ea ed wi h cau ion.
3.1.3. P ice Analysis
Using he eg ession model below, I examine i he UK
so d ink ax leads o inc eases in so d ink p ices (Hypo h-
esis 2):
Log(P ice)i; =β0+β1·Tax +β2·T ea men i
+β3·(Tax ∗T ea men i)
+βk·Xi; +ω +δs+ϵi;
(3)
My dependen a iable Log(P ice)i; deno es he log-
a i hmic eal (in la ion-adjus ed) p ice pe p oduc (i) pe
yea ( ). In he abo e model speci ica ion, he e m Xi; en-
compasses he con ol a iables Unemplo ymen Ra e,GDP,
To al Popula ion and Volume. I a gue ha he i s h ee
a iables can in luence p ice le els, as hese mac oeconomic
indica o s e lec he heal h o he economy. I o exam-
ple, he e is an economic down u n, e lec ed in a high un-
employmen a e o low GDP, people end o pu chase less,
leading o a decline in demand and inally dec easing p ices.
Wi h he a iable Volume I also con ol o he e ec o he
p oduc size on p ices, because small sized d inks end o be
mo e expensi e han la ge olume packs (Wo ld Heal h O -
ganiza ion, 2023a). Fu he mo e, I also con ol o egion
(ω ) and shop ype (δs) ixed e ec s. All he o he a iables
(Tax,T ea men ,Tax ∗T ea men , e o e m) a e iden-
ical o Equa ion (1). Addi ionally, I clus e s anda d e o s
a shop le el, o con ol o co ela ed ou comes wi hin he
same shop. Un o una ely, I was no able o include a lagged
p ice a iable in his model due o he missing panel s uc u e
o my da a (see subsequen Sec ion 3.2.3).
3.2. Da a
Fo a uni ied compa ison, I s anda dise ime pe iods
and nea ly all con ol a iables o all h ee analyses.12 All
11 In line wi h he p e ious mic oeconomic model (see Equa ion (1)), I pe -
o m he same es s o au oco ela ion and hus, include a lagged depen-
den a iable.
12 Besides he uni o m con ol a iables Unemplo ymen Ra e,GDP and
To al Popula ion I addi ionally con ol o Volume in he p ice analysis.
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008 991
da ase s co e pe iods om 2013 o 2023, ensu ing balanced
p e- and pos - ax pe iods. I ob ained my con ol a iables
GDP and To al Popula ion om he Wo ld Bank websi e.
The a iable GDP e lec s he UK’s annual G oss Domes ic
P oduc pe capi a in cu en US $ (Wo ld Bank, 2023a).
To al Popula ion encompasses all esiden s in he UK in-
dependen o hei legal s a us in he coun y (Wo ld Bank,
2023b). I ob ain he annual Unemplo ymen Ra e om he
O ice o Na ional S a is ics. The a iable depic s he p o-
po ion o unemployed indi iduals aged 16 yea s o olde
in ela ion o he wo king popula ion (O ice o Na ional
S a is ics, 2020). Missing alues o he dependen a iables
and con ols a e excluded om all analyses. De ailed sum-
ma y s a is ics and desc ip ions o all a iables can be ound
in he Annex in Tables A1 and A2.
3.2.1. Mic oeconomic Employmen Da a
I ob ain annual employee da a om Re ini i Eikon
Wo ldscope, a global da abase which p o ides inancial
and indus y in o ma ion on public companies. Re ini i is
enowned o i s us ed global equi y indices used o ma ke
analysis. Thei indices cap u e signi ican i ms in a speci ic
s ock ma ke , by including 99.5% o all publicly aded sha es
in a ( ading) ma ke (Re ini i , 2023). Thei sec o indices
a e buil upon he global equi y indices, by appoin ing com-
panies in o p e-de ined indus y g oups acco ding o he
TRBC. The Re e ence Da a Business Classi ica ion (TRBC) is
a ca ego isa ion sys em which g oups companies in acco -
dance wi h hei business ope a ions. The TRBC di ides he
be e age indus y g oup in o he ollowing indus ies: b ew-
e s, dis ille s & wine ies and non-alcoholic be e ages. As
he la e de ini ion is qui e b oad, he da abase also o e s
mo e g anula in o ma ion on he company’s main economic
ac i i y wi h he NAICS code (No h Ame ican Indus y Clas-
si ica ion Sys em).
I use he Re ini i sec o index o he UK be e age indus-
y o de i e a comp ehensi e cons i uen lis o 15 UK be -
e age manu ac u e s. Howe e , I es ic my analysis o com-
panies ha ing hei main sales ma ke in he UK, due o he
subsequen easons.13 As I hypo hesize ha so d ink com-
panies shi he ax bu den on o hei employees, I am o-
cussing on companies di ec ly a ec ed by he so d ink ax.
Hence, I pos ula e ha be e age manu ac u e s mus ha e
hei main sales ma ke in he UK, o a po ion o hei sales
o be no iceably a ec ed by he new ax bu den. He ewi h,
I exclude h ee companies14 om he ini ial cons i uen lis .
13 My de ini ion o main sales ma ke is he ollowing: ei he he Uni ed
Kingdom (UK) o G ea B i ain (GB) mus be wi hin a company’s h ee
bigges sales ma ke s acco ding o hei annual epo in 2023.
14 I exclude Eas Impe ial as he EU is only i s i h bigges sales ma ke , ac-
coun ing o 10% o hei annual sales in 2022 (London S ock Exchange,
2023). Rogue Ba on is excluded om he analysis, as no employmen
da a was a ailable in Wo ldscope. Momen ous Holdings Co p was also
excluded, as i is a holding company (no di ec ly in ol ed in be e age
manu ac u ing i sel ), which cu en ly does no engage in any business
ope a ions, has no e enue (Reu e s, n.d.) and does no ha e any publicly
a ailable in o ma ion.
See Table 1 o a de ailed cons i uen lis and in o ma ion on
he companies’ UK ma ke sha es.
Table 1: Mic oeconomic Employmen Da a
# T ea men G oup Ma ke Cap.
in £b
UK Sales in
%
1Coca-Cola
Eu opaci ic Pa ne s 26.587 17.5% (GB)
2 B i ic 2.406 71,4%
3 Fe e -T ee D inks 1.193 32%
4 A G Ba 0.675 95.6%
5 Nichols 0.365 74%
Con ol G oup
1 Diageo 57.633 9.1 % (GB)
2 Chapel Down G oup 0.114 97.8%
3 Daniel Thaw ies 0.044 100%
4 Gusbou ne 0.039 78.8%
5A isinal Spi i s
Company 0.027 29.8%
6 Adnams 0.006 98%
7 Dis il 0.004 90.2%
No e. Au ho ’s own o e iew based on ma ke capi alisa ion da a e ie ed
om Re ini i (2024a) and sales da a e ie ed om annual epo s in
2023 o he espec i e companies. The g aph depic s 12 o he 15
cons i uen s o he TRBC be e age indus y g oup, which a e included in
my eg ession analysis. Ma ke capi alisa ion is depic ed in billion pounds.
Based on he TRBC o he UK be e age sec o , I appoin
companies o he ea men and con ol g oup as ollows. En-
e p ises ope a ing in he non-alcoholic be e age ma ke a e
assigned o he ea men g oup,15 and he ea e e e ed o
as so d ink companies, as hei main economic ac i i y lies
in so d ink manu ac u ing acco ding o hei NAICS code.
The con ol g oup con ains companies om he dis ille s &
wine ies and b ewe s indus ies and a e he ea e e e ed
o as alcoholic be e age companies.
My inal sample consis s o 12 be e age manu ac u e s,
esul ing in a o al o 106 i m-yea obse a ions. I ha e an
unbalanced panel, as no all companies epo ed employee
da a o each yea . My dependen a iable o in e es , he
numbe o employees, comp ises bo h, ull and pa - ime em-
ployees in a company (Re ini i , 2024b). The numbe o em-
ployees ange be ween se en o hi y housand. In line wi h
Gue e o-López e al. (2017), I use he loga i hmic numbe o
employees o con ol o he igh skewness (no no mal dis i-
bu ion) in he dependen a iable. Due o he high a iance
in he numbe o employees, using he loga i hm also makes
15 Con a y o he TRBC classi ica ion, I appoin Fe e -T ee D inks o he
ea men g oup, as i s main p oduc segmen a e ca bona ed non-
alcoholic mixe s, which a e liable o he UK so d ink ax (Young, 2016).
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008992
he inal esul s mo e compa able, as hey will be in e p e ed
as pe cen age changes ins ead o absolu e alues.
One limi a ion o my da a is ha he sec o indices only
co e publicly lis ed companies. Howe e , Figu e 1indica es
ha he UK be e age ma ke is domina ed by a ew, e y
la ge manu ac u e s. The g aph depic s he UK’s majo be -
e age companies in e ms o hei ma ke capi alisa ion as
a Oc obe 2024 (S a is a, 2024). I indica es ha Diageo,
Coca-Cola Eu opaci ic Pa ne s and B i ic ha e a subs an-
ial lead in e ms o ma ke sha es. I a gue ha manu ac-
u e s which a e no lis ed on he s ock exchange, a e usu-
ally insigni ican in size wi h a low numbe o employees,
compa ed o he leading be e age manu ac u e s depic ed in
Figu e 1. Fu he mo e, I pa ially accoun o hese smalle
manu ac u e s in my mac oeconomic employmen analyses
(see Sec ion 3.2.2). Hence, bo h mic o- and mac oeconomic
employmen analyses a e ep esen a i e o employmen in
he UK be e age sec o .
3.2.2. Mac oeconomic Employmen Da a
To analyse he e ec o he so d ink ax on mac oeco-
nomic employmen , I e ie e annual employmen da a pe
indus y om he Business Regis e and Employmen Su ey
(BRES). This annual su ey co e s 85,000 andomly selec ed
companies egis e ed o VAT and PAYE16 in G ea B i ain and
is conside ed as he go e nmen s p edominan sou ce o em-
ploymen es ima es (O ice o Na ional S a is ics, 2022a).
In he su ey indus ies a e ca ego ised acco ding o he UK
S anda d Indus ial Classi ica ion (SIC). This sys em appoin s
companies in o p e-de ined indus ies based on hei p ima y
economic ac i i y. SIC codes o e a i e-le el b eakdown,
om he sec ion le el (one digi ) o he subclass le el ( i e
digi s) (O ice o Na ional S a is ics, 2009). I de i e my
s a is ics om he di ision le el (e.g. manu ac u e o be -
e ages) and he class le el (e.g. manu ac u e o so d inks,
p oduc ion o mine al wa e s and o he bo led wa e s).
Based on his classi ica ion sys em, I de ine my ea men
and con ol g oups as ollows. Fo my i s mac oeconomic
analysis, I use manu ac u e s o so d inks, p oduc ion o
mine al wa e s and o he bo led wa e s as a ea men
g oup. My con ol g oup consis s o six alcoholic be e -
age manu ac u ing indus ies, which I a gue o be no sig-
ni ican ly a ec ed by he ax e o m, as be e ages wi h an
alcohol con en o 1.2% o mo e a e exemp om he ax. Fo
my second b oade mac oeconomic analysis, he be e age
indus y se es as he ea men and he ex ile indus y as
he con ol g oup. I a gue ha he ex ile indus y is unlikely
o be a ec ed by he so d ink ax and he e o e o e s a
obus compa ison g oup. I also ul ils he pa allel ends
assump ion (see Chap e 4), as i exhibi s he same p e- ax
end as he be e age indus y be o e he e o m in 2018. A
cons i uen lis o he ea men and con ol g oups o my
mac oeconomic analyses can be de i ed om Table 2.
16 Pay as You Ea n (PAYE) is he UK income ax sys em, which di ec ly
deduc s he ax om he employees’ wages (HM Re enue & Cus oms,
n.d.).
Fo he so d ink manu ac u ing analysis, I ha e a bal-
anced da ase consis ing o 22 indus y-yea obse a ions
o e he pe iod 2013 o 2023. The sample o he analysis
o he be e age indus y con ains 71 indus y-yea obse a-
ions and is an unbalanced panel. Fo bo h analyses, he
dependen a iable o in e es is he loga i hmic numbe o
employees, which encompasses ull- and pa - ime employ-
ees in an indus y (O ice o Na ional S a is ics, 2022a).
A limi a ion o his s udy is ha manu ac u ing da a is
only a ailable o G ea B i ain and no he en i e Uni ed
Kingdom. A sepa a e Business Regis e and Employmen Su -
ey is conduc ed o en e p ises si ua ed in No he n I eland
and pa ially p o ides employmen igu es pe indus y as o
2016. Howe e , as his su ey does no consis en ly epo
employmen s a is ics o he sub-classes o he be e age in-
dus y (SIC codes 1101-1107), I exclude hese s a is ics om
my analysis and con inue wi h using G ea B i ain’s employ-
men da a only. I pos ula e ha my es ima es a e ep esen-
a i e o he comple e UK be e age manu ac u ing indus y,
as only a small po ion o he manu ac u e s a e si ua ed in
No he n I eland (3.6%). Table 3unde lines ha my GB da a
ep esen s a signi ican po ion o he UK so d ink manu ac-
u ing indus y (96.4%). Secondly, BRES employmen da a
has an inconsis en de ini ion. Da a om 2009 o 2015 only
su eys VAT- egis e ed businesses in GB, whe eas da a as o
2016 onwa ds addi ionally includes PAYE businesses. Fu -
he mo e, I acknowledge he ac ha my da a does no dis-
inguish be ween employees in so d ink, mine al wa e and
bo led wa e manu ac u ing.
3.2.3. P ice da a
I e ie e annual p oduc p ice da a (CPI p ice quo es in
Janua y o each yea ) om he O ice o Na ional S a is-
ics (ONS) websi e (O ice o Na ional S a is ics, 2024b).
ONS publishes he cons i uen lis o he Consume P ice In-
dex (CPI), namely he CPI p ice quo es, on a mon hly ba-
sis.17 The CPI includes app oxima ely 700 di e en p od-
uc s, o which p ices a e collec ed om oughly 20,000 di -
e en shops ac oss he UK. He eby, he CPI depic s a ep-
esen a i e sample o consume goods. I consump ion pa -
e ns o p oduc a ailabili y in he shop changes, some p od-
uc s ge eplaced. P ices a e hand collec ed om andomly
selec ed shops (O ice o Na ional S a is ics, 2023). Fu he -
mo e, in o ma ion on he egion, p oduc olume, shop code
(i.e. which s o e he p ice was collec ed om) and shop ype
(i.e. i he p ice was collec ed om chains wi h mo e han 10
shops o om independen s o es) can also be ob ained om
he da ase .
Mo eo e , cu en p ices oday (nominal p ice alues)
mus be made compa able o e he yea s due o ising in-
la ion and changing pu chasing powe . To con e nominal
p ices in o eal (in la ion-adjus ed) p ices, he nominal al-
ues a e di ided by an in la ion adjus men ac o , o example
17 The da a is no badged as Na ional S a is ics and is only made a ailable
o esea ch pu poses (O ice o Na ional S a is ics, 2024b).
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008 999
Figu e 6: Pa allel T ends - Mac oeconomic Employmen (Be e age Indus y)
No e. Au ho ’s own o e iew based on employmen da a e ie ed om O ice o Na ional S a is ics (2015,2022b). G aph shows he a e age loga i hmic
numbe o employees in he be e age manu ac u ing indus y ( ea men g oup) and in he ex ile manu ac u ing indus y (con ol g oup) om 2013 o
2023. Loga i hmic numbe o employees is no malised o one in 2017 (i.e. one yea be o e he ax implemen a ion).
y con inuously ises o e he en i e obse a ional pe iod,
compa ed o i s alue in he e e ence yea (2017). Fu -
he mo e, he be e age ( ea men ) and ex ile indus ies
(con ol) bo h ha e a simila posi i e p e- ax end in em-
ploymen , indica ing s ong pa allel ends. Whils he ex ile
indus y exhibi s luc ua ions o e ime, he be e age manu-
ac u ing indus y demons a es a con inuous posi i e end
in employmen , e en a e he ax implemen a ion.
The e en s udy o he be e age and ex ile manu ac-
u ing indus ies is depic ed in Figu e 7. Whils he coe -
icien es ima es seem sligh ly s a is ically signi ican in he
i s wo yea s o he obse a ional pe iod (i.e. 2013 and
2014), hey become insigni ican a e wa ds. Pu di e en ly,
he ex ile and be e age manu ac u ing indus ies ha e com-
pa able loga i hmic employmen le els a e 2015 onwa ds,
making hem alid ea men and con ol g oups. Again, co-
e icien es ima es o 2018 onwa ds a e also s a is ically in-
signi ican , sugges ing ha he so d ink ax did no lead o
a signi ican change in employmen le els o he be e age in-
dus y, compa ed o he change in employmen le els in he
ex ile indus y.
The subsequen Table 6p esen s he eg ession es ima es
o bo h analyses. Fi s , I eg ess he ax e en on he loga-
i hmic numbe o employees in he so d ink manu ac u -
ing indus y. Resul s a e depic ed in Columns (1) and (2).
I hen es ima e he e ec o he so d ink ax on he en i e
be e age manu ac u ing indus y, o which esul s a e p e-
sen ed in Columns (3) and (4). Columns (1) and (3) ep-
esen he coe icien es ima es o eg essing he ax on em-
ploymen in he espec i e indus ies, excluding all con ol
a iables and ixed e ec s. The eg ession es ima es o my
adjus ed models, as desc ibed in Equa ions (1) and (2), a e
shown in Columns (2) and (4).
My eg ession coe icien o in e es , he di e ence-in-
di e ences es ima o , is posi i e when eg essing he so
d ink ax on loga i hmic employmen in he so d ink man-
u ac u ing indus y in Column (1). This implies a posi i e
change in employmen in he so d ink indus y, compa ed
o he employmen change in he con ol g oup. When in-
cluding con ols, his induced change in employmen in he
so d ink indus y becomes nega i e, ela i e o he con ol
g oup. Howe e , bo h e ec s a e s a is ically insigni ican .
Thus, my mac oeconomic eg ession esul s o employmen
in he so d ink indus y a e in line wi h my insigni ican
mic oeconomic eg ession esul . The e o e, I can ejec Hy-
po hesis 1, which pos ula es ha he UK so d ink ax leads
o a dec ease in employmen in he so d ink manu ac u ing
indus y. Pu di e en ly, my esul s emphasise ha employ-
ees in he so d ink manu ac u ing indus y did no bea he
cos o he so d ink ax, as employmen le els ha e no sig-
ni ican ly dec eased due o he ax implemen a ion. A pos-
sible explana ion could be ha ei he i ms migh ha e ab-
so bed he ex a cos s o he new so d ink ax bu den o
ha e passed he cos s on o consume s (see Sec ion 4.3 o
p ice eg ession esul s). Al e na i ely, so d ink companies
migh ha e e en bypassed he ax by e o mula ing hei high
suga y d inks jus in ime, be o e he ax came in o e ec . My
esul s a e in line wi h cu en li e a u e on so d ink axa-
ion and employmen in o he coun ies, such as Pe u, Po -
ugal and he US (Díaz e al., 2023; Gonçal es e al., 2024;
Lawman e al., 2019). They all ound no signi ican e ec o
so d ink axes on employmen in he so d ink manu ac u -
ing indus y in hei espec i e coun ies o analysis.
Con a y, when eg essing he so d ink ax on employ-

L. Wi edu /Junio Managemen Science 10(4) (2025) 985-10081000
Figu e 7: E en S udy - Mac oeconomic Employmen (Be e age Indus y)
No e. Au ho ’s own o e iew based on employmen da a e ie ed om O ice o Na ional S a is ics (2015,2022b). G aph shows he di e ence in
loga i hmic employmen changes be ween he be e age manu ac u ing indus y ( ea men g oup) and ex ile manu ac u ing indus y (con ol g oup).
Con idence in e als a e plo ed a 95 pe cen le el. The las yea s’ coe icien o he in e ac ion e m (T ea men * 2023) was omi ed due o collinea i y.
Hence, only a coe icien es ima e o ze o is plo ed wi hou any con idence in e al.
men in he en i e be e age manu ac u ing indus y, esul s
become highly signi ican (see Columns (3) and (4)). The
di e ence-in-di e ences es ima o o he basic unadjus ed
eg ession is posi i e and s a is ically signi ican (see Col-
umn (3)). P ecisely, he coe icien o 0.274, which has o
be back ans o med i s ,24 indica es ha employmen le -
els in he be e age manu ac u ing indus y inc eased by 32%
mo e han employmen in he ex ile manu ac u ing indus-
y. In Column (4) I see ha his e ec becomes e en la ge
when con olling o con ounding a iables. Due o he UK
so d ink ax, employmen in he be e age manu ac u ing
indus y inc eased by 39%25 mo e han employmen in he
ex ile indus y. I also ind ha he Unemplo ymen Ra e,
GDP,To al Popula ion and he employmen numbe s o
he p e ious yea do no signi ican ly in luence employmen
le els, nei he in he be e age no in he so d ink manu-
ac u ing sec o . Con a y o my ini ial assump ion ha em-
ploymen le els will decline in esponse o he so d ink ax
(see Hypo hesis 1), I obse e ha employees in he be e age
indus y e en bene i ed om he ax, as employmen has
signi ican ly inc eased in his sec o (see Columns (3) and
(4)).
To pu hese pe cen age changes in o ela ion, absolu e
employmen numbe s be o e and a e he ax implemen a-
ion can be e ie ed om Table 7. The absolu e numbe o
employees inc eased in bo h indus ies, he so d ink and he
24 Coe icien es ima es o log-linea models a e in e p e ed as pe cen age
changes (Woold idge, 2013). In his case, he pe cen age change is cal-
cula ed as ollows: (e0,274 −1)∗100 =31.52%.
25 Again, o comp ehension pu poses, he pe cen age change is calcula ed
as ollows: (e0,327 −1)∗100 =38.68%.
o e all be e age manu ac u ing indus y, a e he ax was
implemen ed. Howe e , when con olling o he gene al
g owing ends in he indus ies and o he in luen ial eco-
nomic indica o s (e.g. GDP) in my di e ence-in-di e ences
analysis, only he employmen inc eases in he be e age
manu ac u ing indus y a e signi ican and a ibu able o
he so d ink ax.
I asc ibe his end o non-so -d ink manu ac u ing com-
panies in he be e age ma ke , which migh ha e bene i ed
om spillo e e ec s. Fo example, alcoholic be e age man-
u ac u e s o en di e si y hei p oduc ange, also o e ing
non-alcoholic al e na i es. By an icipa ing he new ax bu -
den o hei compe i o s (so d ink manu ac u ing i ms),
hey migh ha e c ea ed subs i u e p oduc s (e.g. low-suga
non-alcoholic be e ages). Thus, hese ypes o i ms migh
ha e hi ed new employees o p oduc inno a ion asks and
he ewi h inc easing o e all employmen le els in he be e -
age manu ac u ing indus y signi ican ly.
Whils o he s udies ha e ound no signi ican employ-
men e ec s (Díaz e al., 2023; Gonçal es e al., 2024; Law-
man e al., 2019; Ma inello, Leide , & Powell, 2021), I a gue
ha he UK has a di e en se ing. Compa ed o o he coun-
ies wi h o en uni o m ax a es, he UK so d ink ax has
a wo- ie ed ax design o encou age e o mula ion. I pos u-
la e ha his ax policy inc eased o e all employmen le els
in he be e age manu ac u ing indus y, due o inc eased de-
mand o employees o ul il new p oduc inno a ion asks.
Employmen le els in he so d ink indus y we e no sig-
ni ican ly a ec ed. This indica es ha hey migh ha e no
equi ed addi ional s a ing o e o mula ion, as hey migh
ha e solely passed on he ax o consume s. Howe e , as a -
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008 1001
Table 6: Employees Mac oeconomic Reg ession
So D ink Manu ac u ing Indus y Be e age Manu ac u ing Indus y
Log(Employees) (1) (2) (3) (4)
T ea men *Tax 0.613 -0.129 0.274∗∗∗ 0.327∗∗∗
(0.529) (0.106) (0.068) (0.076)
T ea men 1.605∗∗∗ -0.336∗∗∗
(0.342) (0.046)
Tax -0.320 0.360∗∗ -0.042 -0.089
(0.527) (0.171) (0.058) (0.095)
Unemploymen Ra e 0.043 -0.044
(0.096) (0.034)
GDP -0.000 0.000
(0.000) (0.000)
To al Popula ion 0.000 -0.000
(0.000) (0.000)
Lag Log Employees 0.354 -0.253
(0.308) (0.237)
Obse a ions 73 71 22 22
Indus y FE No Yes No Yes
Adjus ed R20.082 0.957 0.703 0.706
No e. Au ho ’s own es ima ions. Coe icien es ima es a e p esen ed sepa a ely o he dependen a iable Log(Employees) in he so d ink manu ac u ing
indus y (Columns (1) and (2)) and in he be e age manu ac u ing indus y (Columns (3) and (4)). Columns (1) and (3) depic he coe icien es ima es o
eg essing he ax e en on loga i hmic numbe o employees. The ully speci ied (adjus ed) models in Columns (2) and (4) addi ionally con ol o
Unemplo ymen Ra e,GDP,To al Popula ion and indus y ixed e ec s. S anda d e o s a e he e oskedas ici y- obus bu no clus e ed due o
insu icien numbe o indus y g oups. S anda d e o s in pa en heses ∗p<0.10, ∗∗ p<0.05, ∗∗∗ p<0.01.
Table 7: A e age Absolu e Numbe o Employees (Mac oeconomic)
#
So D ink
Manu ac u ing
Indus y
Alcoholic Be e age
Manu ac u ing
Indus y
Be e age
Manu ac u ing
Indus y
Tex ile
Manu ac u ing
Indus y
Be o e Tax 10,000 5,151 37,400 52,400
A e Tax 13,333 5,719 47,167 50,333
Absolu e Di e ence 3,333 568 9,767 -2,067
Change in % 33.33 11.03 26.11 -3.94
No e. Au ho ’s own o e iew based on employmen da a e ie ed om O ice o Na ional S a is ics (2015,2022b). The able shows he a e age numbe
o employees in absolu e alues be o e (2013-2017) and a e he ax was implemen ed (2018-2023) o each indus y sepa a ely. The change in he
a e age numbe o employees is depic ed in pe cen .
gued abo e, I belie e ha alcoholic be e age manu ac u e s
ha e u ilised he so d ink ax in oduc ion o expand hei
p oduc po olio. Thus, equi ing addi ional employees and
he ewi h inc easing o e all employmen in he be e age sec-
o .
4.3. P ice Reg ession Analysis
As employees in he so d ink manu ac u ing indus y did
no ha e o bea he cos s o he so d ink ax, and employees
in he be e age manu ac u ing indus y e en bene i ed om
i , I now analyse whe he he ax bu den was passed on o he
consume . Thus, I eg ess he UK so d ink ax on so d ink
p ices. The ollowing wo g aphs highligh he s eng h o my
p ice eg ession analysis. Figu e 8shows he de elopmen o
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-10081002
Figu e 8: Pa allel T ends - P ices
No e. Au ho ’s own o e iew based on p ice da a e ie ed om O ice o Na ional S a is ics (2024b). G aph shows he a e age loga i hmic eal p ice pe
li e o so d inks ( ea men g oup) and le y-exemp be e ages (con ol g oup) om 2013 o 2023. The loga i hmic eal p ice pe li e is no malised o
one in 2017 (i.e. one yea be o e he ax implemen a ion).
Figu e 9: E en S udy - P ices
No e. Au ho ’s own o e iew based on p ice da a e ie ed om O ice o Na ional S a is ics (2024b). G aph shows he di e ence in loga i hmic eal p ice
pe li e changes be ween so d inks ( ea men g oup) and le y-exemp be e ages (con ol g oup). Con idence in e als a e plo ed a 95 pe cen le el.
he a e age loga i hmic eal p ice pe li e26 o so d inks
( ed line) and le y-exemp be e ages (e.g. juices and wa e )
(blue dashed line), ela i e o he e e ence yea 2017. The
end o so d ink p ices seems o be ela i ely s able o e
he comple e obse a ional pe iod and only showing a sligh
decline in he p e- ax pe iod. Howe e , he p ices o le y-
exemp be e ages cons an ly decline un il 2019 (and he e-
a e luc ua e) a a much highe a e.
26 He ea e p ices is used as synonym.
I he e o e conduc an e en s udy o u he in es iga e
he pa allel ends assump ion. Figu e 9depic s he di e -
en ial changes be ween he loga i hmic eal p ice pe li e o
le y-exemp be e ages and so d inks. As all coe icien s a e
s a is ically insigni ican , i can be assumed ha he e was
no di e ence in p ice changes o le y-exemp be e ages and
so d inks. This shows ha he pa allel ends assump ion
o ea men and con ol g oup holds. O e all, he e en
s udy also indica es ha he so d ink ax p obably does no
ha e a s a is ically signi ican impac on he so d ink p ices,
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008 1003
as he coe icien s emain s a is ically insigni ican a e he
ax came in o e ec .
As loga i hmic pe cen age in e p e a ions can be wo old
a i s sigh in di e ence-in-di e ences analyses, I also p o-
ide an o e iew o a e age absolu e p ices be o e and a e
he ax implemen a ion in Table 8. The o e iew shows ha
so d ink p ices as well as p ices o le y-exemp be e ages
in gene al dec eased o e my en i e obse a ional pe iod be-
ween 2013 o 2023. Whils he a e age so d ink p ice
was £3.85 in he p e- ax pe iod, so d inks on a e age only
cos ed £3.17 pos ax, a o al dec ease o 68 pence. The same
end is also obse able o le y-exemp be e ages. To u -
he es whe he and o wha ex en his p ice change is a -
ibu able o he in oduc ion o he so d ink ax, o whe he
hese declines a e a gene al end o economic down u n, I
conduc a di e ence-in-di e ences analysis.
Table 8: A e age Absolu e P ices
# So D ink
P ices
Le y-Exemp
Be e ages
Mean P ice pe Li e
be o e ax (£ 2018)
3.85 1.34
Mean P ice pe Li e
a e ax (£ 2018)
3.17 1.09
Di e ence in P ices -0.68 -0.25
Change in % -17.7 -18.5
No e. Au ho ’s own o e iew based on p ice da a e ie ed om O ice o
Na ional S a is ics (2024b). The able shows he mean eal p ice pe li e
in absolu e alues be o e (2013-2017) and a e he ax (2018-2023) was
implemen ed o ea men (so d inks) and con ol g oup (le y-exemp
be e ages) sepa a ely. The change in a e age p ice is depic ed in pe cen .
The esul s o my p ice eg ession analysis a e epo ed
in Table 9. I i s eg ess he so d ink ax e en solely on my
dependen a iable loga i hmic eal p ice pe li e (see Col-
umn (1)). The di e ence-in-di e ences es ima o indica es
ha he ax leads o a posi i e change in so d ink p ices
ela i e o he change in p ices o le y exemp be e ages.
Howe e , his e ec is no s a is ically signi ican . When con-
olling o con ounding a iables, as well as o egion and
shop ixed e ec s, I es ima e a s a is ically signi ican posi-
i e e ec on p ice changes (see Column (2)). As I know
ha p ices o so d inks declined o e he comple e obse a-
ional pe iod, I e ise he in e p e a ion o he di e ence-in-
di e ences es ima o . As i s coe icien depic s he di e ence
in p ice changes be ween he ea men g oup compa ed o
he con ol g oup, a posi i e coe icien ei he indica es ha
p ices inc eased mo e o declined less in he ea men g oup
han in he con ol g oup. In my case, I ind ha , despi e he
o e all declining end o be e age p ices in he UK, he so
d ink ax led o a 6%27 less decline in p ices o so d inks
27 Again, o comp ehension pu poses, he pe cen age change is calcula ed
as ollows: (e0,058 −1)∗100 =5.97%.
compa ed o p ices o le y-exemp d inks. Pu di e en ly,
e en hough he ax did no lead o signi ican p ice inc eases,
i slowed down he gene al alling end o so d ink p ices.
I can be said ha , al hough he consume did no isibly
bea he so d ink ax bu den in he o m o highe p oduc
p ices, I a gue ha hey we e s ill cons ained by he ax, as
so d ink p ices would ha e declined e en as e wi hou he
ax.
To quan i y how much o he ax bu den was passed on o
he consume , a pass h ough a e is es ima ed. Howe e , as
emphasised by S acey e al. (2019), pass h ough a es can
only be e ie ed om eg ession analyses o uni o m ax
a es. Fo ie ed ax a es, such as he UK so d ink ax, based
on he suga con en and he applicable ax h eshold, he
pass- h ough a e could be calcula ed o each speci ic p od-
uc . Howe e , as my da a does no p o ide nu i ional in-
o ma ion, I am no able o calcula e he ac ual pass- h ough
a e o he UK so d ink ax. Howe e , I es ima e he change
in absolu e p ices, p o ided in Table 8, o comp ehension
pu poses only. While Table 8shows ha so d ink p ices
(-17.7%) declined sligh ly less han le y exemp be e age
p ices (-18.5%), his does no depic he ue causal e ec
o he so d ink ax. My di e ence-in-di e ences analysis,
which con ols o o he in luences on p ices, inds ha so
d ink p ices declined on a e age 6% less due o he so d ink
ax and ela i e o le y-exemp be e age p ices.
While declining p ices seem coun e in ui i e a i s , his
end could be caused by a gene al decline in demand o ce -
ain be e ages, which migh lead o signi ican p omo ions
and he ewi h p ice dec eases. Pu ing his in o con ex , one
o he ew s udies in his ield, which also analyses he p ice
e ec s o he UK so d ink ax, yields simila esul s. Using
addi ional da a on suga con en , Sca bo ough e al. (2020)
di e en ia e be ween he wo ax le ies (i.e. he lowe le y
h eshold has a ax a e o 18 pence pe li e and he highe
le y h eshold o 24 pence pe li e). They ind ha p ices o
so d inks om he lowe le y ie dec eased by 10.7 pence,
holding a ax pass- h ough a e o -59%. Howe e , hey also
ind ha p ices in he highe le y ie inc eased by 7.5 pence
on a e age, equi alen o a pass- h ough a e o he ax on o
consume s o 31%. They also iden i y an o e all declining
p ice end o be e ages in he con ol g oup, which cos ed
1.5 pence less 50 days pos ax implemen a ion.
O e all, my p ice esul s indica e ha he UK so d ink
ax decele a ed he alling end o so d ink p ices. Whils
he gene al dec ease in be e age p ices is ano he esea ch
opic o i sel , I a gue ha he be e age ma ke is qui e com-
pe i i e, wi h a ew la ge manu ac u e s p edomina ing he
ma ke (see Figu e 1). Thus, e ail p ices ha e o be kep as
low as possible (e.g. by o e ing p ice p omo ions), in o de
o be e age companies o emain compe i i e. In iew o he
UK so d ink ax in oduc ion, manu ac u e s we e no able
o hold so d ink p ices as compe i i e as he p ices o o he
le y-exemp be e ages. This could be a ibu able o he new
ax bu den, which so d ink manu ac u e s pa ially passed
on o consume s, in he o m o ewe p ice p omo ions, com-
pa ed o wha hey would ha e o e ed consume s, i he ax
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-10081004
Table 9: P ice Reg ession
Log(P ice) (1) (2)
T ea men *Tax 0.036 0.058∗∗∗
(0.037) (0.022)
T ea men 0.700∗∗∗ 0.535∗∗∗
(0.099) (0.043)
Tax -0.223∗∗∗ -0.134∗∗∗
(0.020) (0.017)
Unemploymen Ra e 0.063∗∗∗
(0.010)
GDP 0.000∗∗∗
(0.000)
To al Popula ion 0.000∗∗
(0.000)
Volume -0.994∗∗∗
(0.035)
Region FE No Yes
Shop Type FE No Yes
Obse a ions 31,957 31,957
Adjus ed R20.142 0.587
No e. Au ho ’s own es ima ions. Column (1) depic s he coe icien es ima es o eg essing he ax e en on loga i hmic eal p ice pe li e (i.e. cons an
2018 pounds). The ully speci ied model in Column (2) addi ionally con ols o U nemplo ymen Ra e,GDP,To al Popula ion,Volume, as well as egion
and shop ype (i.e. chains wi h mo e han 10 shops o independen s o es) ixed e ec s. S anda d e o s a e he e oskedas ici y- obus and clus e ed a shop
code le el (i.e. unique shop iden i ie , indica ing om which shop he p oduc p ices we e collec ed om). S anda d e o s in pa en heses ∗p<0.10, ∗∗ p
<0.05, ∗∗∗ p<0.01.
would ha e no been implemen ed (see declining end in
so d ink p ices be o e he ax).
An al e na i e explana ion is ha manu ac u e s did no
ha e o pass he so d ink ax on o consume s, i hey had e-
o mula ed hei so d inks ea ly enough o bypass he le y.
Sca bo ough e al. (2020) ound ha one yea a e he UK
so d ink ax implemen a ion, suga in axable so d inks28
was educed by 2.13 g ams pe 100 millili es on a e age.
They obse e ha one yea a e he ax, 30.7% o he so
d inks ha we e ax liable (i.e. had a suga con en o 5 g
pe 100 ml o mo e), mo ed below he 5 g suga h eshold.
This unde lines ha , in line wi h he UK so d ink ax objec-
i e, manu ac u e s subs an ially dec eased he suga le els
in hei p oduc s. O e all, I sugges ha u he analyses on
he p ice e ec s associa ed wi h he UK so d ink ax need
o be conduc ed o ensu e mo e anspa en esul s.
5. Robus ness Checks
I es he alidi y o my p ice and employmen eg ession
esul s by pe o ming a a ie y o adjus men s o my main
28 Re e ed o as in e en ion d inks in Sca bo ough e al. (2020).
model speci ica ions (Equa ions (1)–(3)). Resul s can be
de i ed om Tables A2 o A4 in he Annex. The es s a e de-
sc ibed in de ail below. The i s wo checks a e applied uni-
o mly o all model speci ica ions (Equa ions (1) - (3)). Ro-
bus ness check h ee is applied uni o mly o all employmen
analyses (Equa ions (1)-(2)). He ea e , speci ic checks o
p ice and employmen analyses a e conduc ed, adap ing o
he needs o he espec i e da ase s.
1) Co id-19 Pandemic
The Co id-19 pandemic signi ican ly impac ed economies
wo ldwide, and he ewi h no only a ec ed employmen bu
also p ices due o high in la ion. Thus, I e- un all eg es-
sion analyses, limi ing my obse a ional pe iod om 2013 o
2020, o accoun o he Co id c isis as con ounding e o
(in employmen and p ice es ima es). All esul s a e obus
o his change (see Column (1) in Tables A2 - A4).
2) Tax Announcemen E ec
As he UK so d ink ax was announced in 2016, wo
yea s be o e i s ac ual implemen a ion, so d ink manu-

L. Wi edu /Junio Managemen Science 10(4) (2025) 985-1008 1005
ac u e s migh ha e al eady adjus ed hei p oduc p ices
o employmen le els o compensa e he an icipa ed u u e
cos s o he ax. This beha iou , also known as he Ashen el-
e Dip, could dis o eg ession esul s when he ea men
g oup signi ican ly changes hei beha iou in he p e- ax pe-
iod (Lee, 2016). The e o e, I use he ax announcemen as
eg esso . I disco e ha only my mac oeconomic so d ink
analysis yields he same esul s as in he main speci ica ion.
Resul s om my mac oeconomic be e age indus y analysis
emain posi i e bu become insigni ican (see Column (7) in
Table A3). Posi i e mic oeconomic employmen es ima es,
which we e insigni ican be o e, become signi ican . This in-
dica es ha he announcemen o he so d ink ax-induced
inc eases in employmen o so d ink companies, compa ed
o alcoholic be e age companies. As his signi ican e ec
in he p e- ax pe iod could dis o my main mic oeconomic
eg ession es ima es (Table 5), esul s ha e o be ea ed
wi h cau ion. My p ice es ima es, which we e signi ican ly
posi i e in he adjus ed speci ica ion (Table 9), become in-
signi ican ly nega i e (see Column (2) in Table A4). O e all,
his indica es ha he announcemen o he UK so d ink ax
had no e ec on so d ink p ices.
3) Sepa a e Es ima ions o Fixed E ec s and Lagged Model
Speci ica ions
Ang is and Pischke (2009) emphasise ha ixed e ec s
eg essions oge he wi h lagged dependen a iables mus
be applied wi h cau ion due o hei di e en assump ions.
Thus, as sugges ed by he au ho s, I es ima e each model
sepa a ely. I apply his obus ness check exclusi ely o my
employmen analyses, as no lagged a iables a e included
in my p ice analysis due o he missing panel componen o
he da a. The mac oeconomic esul s emain obus . In Ta-
ble A4, he mic oeconomic esul s emain posi i e when he
lagged dependen a iable is excluded (see Column (3)) bu
become insigni ican ly nega i e when excluding ixed e ec s
(see Column (4)). Howe e , I a gue ha he esul s o my
main model speci ica ion (see Columns (1) and (2) in Ta-
ble 5) a e likely o be alid due o he subsequen eason.
Ang is and Pischke (2009) pos ula e ha sepa a e es ima-
ions o ixed e ec s and lagged dependen models se e as a
b acke in which he ue causal e ec lies. When he lagged
dependen model speci ica ion is co ec , bu a ixed e ec s
model is inco ec ly applied, his leads o an o e es ima ion
o he ac ual e ec (uppe bound). Vice e sa, i a lagged
dependen model is inco ec ly applied ins ead o he co ec
ixed e ec s model, his leads o an unde es ima ion o he
causal e ec (lowe bound) (Ang is & Pischke, 2009). Thus,
my ixed e ec s es ima ion (see Column (3) in Table A2) is
he uppe bound and he lagged dependen a iable model
he lowe bound (see Column (4) in Table A2), in which he
ue causal e ec o my main model speci ica ion lies (see
Column (2) in Table 5).
4) Employmen Analyses 2016 o 2023
Fu he mo e, I con ol o he change in me hodology o
he Business Regis e and Employmen Su ey, om which
my mac oeconomic employmen da a is ob ained. Whils
da a be ween 2009 o 2015 only encompasses VAT egis e ed
businesses in G ea B i ain, da a om 2016 o 2023 addi-
ionally includes smalle i ms wi h less han 20 employees
(i.e. Pay As You Ea n [PAYE]businesses) (O ice o Na ional
S a is ics, 2017). To con ol o his inconsis ency, I exclude
all obse a ions be o e 2016 in my mac oeconomic employ-
men analyses and ind ha my esul s a e s ill obus (see
Columns (5) and (10) in Table A3).
5) UK P ima y Sales Ma ke
My mic oeconomic employmen analysis only includes
businesses o which he UK is a leas hei hi d bigges sales
ma ke . I igh en his es ic ion in he obus ness analysis o
encompass only companies wi h he UK as p ima y sales ma -
ke . I he ewi h exclude he la ges mul ina ionals, namely
Coca-Cola Eu opaci ic Pa ne s and Diageo. Again, my e-
g ession esul s a e obus (see Column (5) in Table A2).
6) Missing P e-Tax Da a
In my mic oeconomic employmen analysis, I con ol o
he missing p e- ax da a o companies. Hence, I exclude A -
isinal Spi i s, Adnams, Gusbou ne and Dis il om my analy-
sis, and ind ha my ini ial esul s a e alid (see Column (6)
in Table A2).
Fo my p ice analysis I also exclude i ems wi h insu icien
p e- ax obse a ions. Thus, I exclude all cola d inks (i em
IDs 212011, 21025 and 21026), a bo le o mixe (i em ID
212022) and a wa e bo le (i em ID 21025). My ini ial e-
sul s a e also obus o his es (see Column (3) in Table A4).
7) “Pseudo” Panel Da a
Las ly, o con ol o po en ial au oco ela ion in my e-
pea ed c oss-sec ional p ice da ase , I cons uc an a i icial
(“pseudo”) panel s uc u e. I compu e he a e age p ice o
each i em pe pe iod, esul ing in 143 unique i em-yea ob-
se a ions. This obus ness check yields simila esul s as my
ini ial p ice eg ession (see Column (3) in Table A4).
6. Conclusion
This pape analyses he medium- e m e ec s o he UK
so d ink ax on employmen and p ice le els. I ind ha nei-
he consume s no employees had o bea he cos o he so
d ink ax isibly. Howe e , despi e he o e all alling end
in be e age p ices, consume s o so d inks we e minimally
cons ained by he ax, as hey expe ienced a 6% less decline
in so d ink p ices ( ela i e o le y-exemp be e ages) han
hey would ha e wi hou he ax implemen a ion. Whils he
L. Wi edu /Junio Managemen Science 10(4) (2025) 985-10081006
ax had no signi ican impac on employmen in he so d ink
indus y, I obse e signi ican employmen inc eases in he
en i e be e age indus y. I pos ula e ha alcoholic be e age
manu ac u e s inc eased hei s a ing o p oduc inno a ion
pu poses (e.g. low suga y non-alcoholic d inks), o a ac
so d ink consume s wi h hei mo e compe i i e p ices han
hose o hei ax bu dened compe i o s.
By using i e yea s pos - ax da a, my s udy o e s no el in-
sigh s on he mo e mani es ed s uc u al changes in he be -
e age sec o , which has no been accoun ed in he nume ous
sho - e m s udies be o e. I he ewi h p o ide e idence o
policymake s and he UK go e nmen , showing ha he so
d ink ax did no come a he cos o employees and only
minimally bu dened consume s. Based on my esul s, he
go e nmen can e ise and adap he policy o u he incen-
i ise e o mula ion and he ewi h unbu den he consume .
My s udy is limi ed in he ollowing ways. Due o miss-
ing nu i ional in o ma ion, I was no able o dis inguish he
e ec o he so d ink ax on lowe le y and highe le y ie
d inks. Hence, I also could no quan i y he pass- h ough a e
o he ax. Thus, I was also unable o iden i y as o how much
i ms a e bu dened wi h he ax o bypass i by educing suga
in so d inks jus below he h eshold (i.e. bunching). An-
o he limi a ion is ha I could no accoun o au oco ela ion
in p ices, hence p ice es ima es ha e o be in e p e a ed wi h
cau ion. Las ly, due o he lack o an adequa e geog aphical
con ol g oup, I was no able o con ol o po en ial spillo e
e ec s o he ax (e.g. shi s o employmen om he so
d ink indus y in o alcoholic be e age manu ac u ing indus-
y).
As my s udy and he ew o he s udies in his ield di-
e ge la gely in es ima ions, I encou age u he p ice analy-
ses o a i e a a common unde s anding on he ax incidence
o consume s. Also, u he esea ch on he gene al p icing
s uc u e in he UK be e age ma ke needs o be conduc ed,
o comp ehend he unusual end o he o e all decline in
be e age p ices.
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