There is no guarantee that manufacturers will pass on the excise tax,
but other positive outcomes could result. Manufacturers could increase
the price of all products, decrease portion sizes, decrease sugar in
products, absorb the tax or pass it on to consumers. In the Pacific
Islands, large revenues were reported but there were insufficient data to
calculate the impact of SSB taxes on population consumption.
For tobacco, manufacturers use trade discounts, coupons, and other
promotions to counteract the effects of excise taxes.To establish a
minimum price at which SSBs can be sold to consumers, countries and
states can institute minimum price laws and expressly prohibit trade
discounts.In the United States, minimum price laws coupled with an express prohibition on trade discounts, result in higher prices to
discourage tobacco purchase.