Amidst a global debate concerning the implementation of excise tax proposals on sugary beverages, Euromonitor International has employed an inductive demand model to aid in five-year forecasting.
The model attempts to identify several measureable and statistically significant demand factors against available data for retail and on-trade beverage category sales weighted in building 2015-2019 country forecasts.
Australia is currently in the top 10 markets for carbonates consumption in terms of per capita retail volume sold, leading Euromonitor to consider potential impact of a soft drinks tax by recording historical price increases and the effect they’ve had on Australian retail sales of carbonates.
In a Euromonitor blog post, Howard Telford said “There is greater uncertainty over the impact of a substantial soda tax in Australia, because there is simply no precedent for a substantial price shock in the Australian retail market.”
Telford believed that the introduction of a soda tax would be accompanied by a public health debate in the media that could impact consumer attitudes towards carbonates for reasons other than price.
Euromonitor’s data showed significant declines in full flavoured cola and wider carbonated beverages in Australia that has resulted in declining prices and a consumer migration to low calorie cola (and non-cola carbonate) alternatives.
Consumers making well-publicised concerns about existing cola were found to be doing so independent of price considerations and motivated instead by health or taste considerations.
Whether or not a sugar tax is implemented, the Euromonitor International data clearly showed that consumers had been rapidly changing their attitudes towards health, sugar and lifestyle choices –a move that Telford suggests means that Australian consumers may have already found an alternative to implementing a sugar tax.