ITHACA, New York – A Cornell-University of Iowa analysis of Berkeley, California’s soda tax that took effect in March, the first such city ordinance in the United States, has found that the measure is fizzling and raising retail prices for high-calorie sugary drinks by less than half the amount expected, writes Ted Boscia, director of communications and media for the College of Human Ecology, in the Cornell Chronicle.

The law imposes a penny-per-ounce tax on distributors of sugar-sweetened beverages, such as soft drinks, energy drinks and presweetened teas. For example, distributors pay 20 cents per 20-ounce bottle of Coke or Pepsi, notes the news source. Proponents of the soda tax anticipated that the additional costs would translate to higher prices at retail and discourage shoppers from purchasing the products.

However, according to the research, consumers aren’t finding higher prices on store shelves. On average, prices for beverages covered under the law increased by less than half of the tax amount. The news source writes that for Coke and Pepsi, only 22% of the tax was passed on to consumers.

“In light of the predictions of the proponents of the tax, as well as in light of the previous research, we expected to see the tax fully passed through to consumers,” said John Cawley, professor in the Department of Policy Analysis and Management, and the Department of Economics, at Cornell University, in the study, “The Incidence of Taxes on Sugar-Sweetened Beverages: The Case of Berkeley, California.” In contrast, adds Cawley, “we find that less than half, and in some cases, only a quarter of it is. This is important because the point of the tax was to make sugar-sweetened beverages more expensive” so consumers would purchase and consume less of the products.

“The reason for this surprising result could be related to the fact that it's a city tax and therefore store owners have to be concerned about the ability of consumers to shop at stores outside of Berkeley,” Cawley said. “Concerns about cross-border shopping could contribute to a low pass-through of the tax.”

Berkeley’s soda tax revenue is projected to be $1.2 million in its first year.