Estructura de Mercado y Elasticidad Precio de la Demanda en el Sector de Bebidas Azucaradas en Argentina

DANIEL MACEIRA; ALFREDO PALACIOS

Conferencia; Sistemas de Alimentación en América Latina; 2017

Tax policies on soft drinks beverages have been proposed in several countries as a strategy to reduce the social and economic impact of non-communicable diseases (such as cardiovascular related illnesses and diabetes type II), improving health care outputs. As consumption levels of any product are affected by changes in its price levels (demand price elasticity), tax policies on sugar sweetened beverages (SSB) can be seen as an accurate economic tool to reduce/deter consumption. Nevertheless, a series of additional factors should be consider at the moment of designing a fiscal policy, such as prevalence of obesity, SSB consumption levels and changes of preferences, current tax structure and levels, etc. Several studies analyzing tax policies and their effect on SSB were performed for the USA case, showing a relatively elastic response to SSB prices (-1.3), although limited number of similar studies were performed in Latin America. In those cases, demand price elasticity estimations vary from -0.85 to -1.16. Differences across them involve not only national idiosyncratic characteristics, but also heterogeneous sources of information and estimation methodologies. The study proposes the estimation of a system of demand functions for SSB?s, applying the Almost Ideal Demand Systems (AIDS), developed by Deaton and Muelbauer (1980), the standard method used in the literature, where total expenses of a certain beverage from a specific household relates to a vector of prices (own and others?) and non-prices characteristics. The research program uses two years of the National Households? Consumption Survey (ENGHo) of Argentina, performed by INDEC, with accounts by around 21,000 observations each. Surveys provide socio-demographic information at household level, including out of pocket expenditures by groups and subgroups of goods and services, quantities bought in each case, allowing the calculation of implicit prices by type of good/service. Expenditures in soft drinks includes sodas, flavored waters, juices (ready to drink, concentrated, powers), and water (with and without gas). Results show own elasticities for sodas of about -1.12, higher than juices (-1.17). Across economic groups, demands are marginally more elastic with income in the case of sodas, and more inelastic if comparisons are associated with juices or mineral waters. The research also analyzes the evolution of consumption patterns during the last five years, revealing that even when SSB real prices went down, people decided to switch to beverages with lower sugar content (flavored waters), and to second brands. These, in turn, provoked a move toward horizontal product diversification in the supply side of the market, especially major international brands. Finally, the study proposes a set of tax simulation scenarios to foresee the impact of different alternatives, and their effect on local consumption.