Removing candy and soft drinks from New Hampshire’s SNAP program would cost retailers an estimated $5.3 million-$17.8 million a year in lost candy and soft drink sales alone, a new study by the Josiah Bartlett Center for Public Policy finds.
The U.S. Department of Health and Human Services and the U.S. Department of Agriculture have launched new initiatives to encourage the consumption of healthier foods and beverages by all Americans. As part of this effort, U.S. Secretary of Agriculture Brooke Rollins last year encouraged all states to apply for waivers to exclude candy and soft drinks from being eligible for purchase through the federal Supplemental Nutrition Assistance Program (SNAP).
Joining in this effort, New Hampshire legislators have introduced three bills in the current session to remove candy and soft drinks from the list of items that can be purchased with a SNAP benefits card.
Using publicly available data on actual SNAP spending both nationally and in New England, the Josiah Bartlett Center for Public Policy has estimated the likely economic costs that would result from a state-level ban on using SNAP benefits to purchase candy and soft drinks.
Banning the purchase of candy and soft drinks with SNAP benefits would cost New Hampshire retailers between $5.3 million-$17.8 million in lost sales annually on those items alone, depending on how effective the ban is at discouraging consumption, the center estimates.
If the ban worked perfectly and stopped SNAP recipients from purchasing candy and soft drinks, New Hampshire retailers would expect to see a loss of $12.4 million in sales from New Hampshire residents and $5.4 million from residents of Maine, Massachusetts and Vermont who spend SNAPd dollars in New Hampshire.
But previous research on the effects of SNAP restrictions suggests that 70% of spending on restricted items would be shifted to other payment methods. If that were to hold for these proposed restrictions, then sales of those items would be expected to drop by only 30%.
A 30% reduction in SNAP purchases of candy and soft drinks would equal a $5.3 million annual hit to New Hampshire retailers, including purchases by New Hampshire residents and border-state residents.
These figures are for sales lost from reduced spending on candy and soft drinks alone. They do not include other lost sales that could occur if the restrictions cause fewer border-state residents to shop in New Hampshire altogether. Were the restrictions to cause a reduction in cross-border business generally, their cost would be substantially higher.
The estimate also does not include adjustment costs that retailers would incur to implement the bans. The National Grocers Association, the Food Industry Association, and the National Association of Convenience Stores did estimate those costs at the national level. Applying their analysis to New Hampshire retailers, the total cost, including lost sales and retailer administration expenses, would be as much as $23.2 million in the first year of implementation.
Aside from the direct economic costs, legislators will also want to consider whether the bans would actually achieve their stated goals. If SNAP benefits cannot be used to purchase candy and soft drinks, SNAP participants could simply buy those items with their own money. Or they could use their benefits to buy different treats, such as doughnuts, cookies, and ice cream. None of the proposed bans accounts for those potential tradeoffs or for the potential to discourage cross-border sales. The bottom line is that such bans at the state level would face challenges producing results, while still imposing significant economic costs.
Read and download the full study here: Bartlett Brief SNAP Benefit Candy & Soda Restrictions
