Who pays and Who benefits? A distributional health-economic evaluation of strengthening the UK soft drinks industry levy

This paper examines the distributional welfare effects of strengthening the UK Soft Drinks Industry Levy (SDIL). Using individual-level dietary data from the UK National Diet and Nutrition Survey, we simulate three scenarios for strengthening the SDIL within a comparative risk assessment framework and translate policy-induced reductions in sugar intake from sugar-sweetened beverages into changes in quality-adjusted life years over a 10-year horizon. Health gains are monetised at willingness-to-pay thresholds of £20,000 and £30,000 per quality-adjusted life year, while consumer burden is expressed relative to household resources using Office for National Statistics income and expenditure benchmarks.Results show that stronger levy designs yield greater reductions in sugar intake and body mass index, and deliver positive net monetised benefits under the two stronger scenarios. Health gains are disproportionately concentrated among more deprived groups because baseline sugar-sweetened beverage exposure is socially graded, and these groups exhibit greater price responsiveness. Health-gain ratios between the most and least deprived quintiles consistently exceed the corresponding burden ratios across all age groups. When expressed relative to income or expenditure, consumer burden shares decline monotonically from the most to the least deprived quintile, confirming financial regressivity. Weighted gradient tests show that this regressivity is a consistent structural feature across age groups rather than being concentrated in any particular life stage. Overall, a strengthened levy appears regressive in payment incidence but progressive in health terms, highlighting the importance of jointly assessing financial burdens and health benefits when evaluating corrective health taxes.