A Study on the Impact of Sugar-Control Health Policy Announcements on the Abnormal Stock Returns of Traditional Sugary Drink Enterprises: Based on the Event Study Methodology_Vol. 3 No. 2 (JBM 2026)_Journal of Business and Marketing (ISSN: 3005-5717)

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A Study on the Impact of Sugar-Control Health Policy Announcements on the Abnormal Stock Returns of Traditional Sugary Drink Enterprises: Based on the Event Study Methodology

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DOI: https://doi.org/10.62517/jbm.202609212

Author(s)

Wingshun Tang

Affiliation(s)

Business School, Central South University, Changsha, Hunan, China

Abstract

With the exacerbation of the global non-communicable disease burden, the upgrade of health needs has become an irreversible trend, and the "sugar-control" public health policies intensively introduced by governments constitute a systematic external shock to the beverage industry. This paper aims to study the impact of sugar-control health policy announcements (independent variable) on the abnormal stock returns of traditional sugary drink enterprises (dependent variable). Employing the event study methodology, this research designates the official announcement date of the UK Soft Drinks Industry Levy (SDIL) as the event day, selects core soft drink enterprises listed on the stock exchange as the sample, and calculates their abnormal returns using the single-factor market model. On the policy announcement day, the sample enterprises experienced statistically significant negative abnormal stock returns, with a maximum drop of 7.5%, which was significantly different from zero at the 5% level; whereas in the extended case study of the Chinese market, traditional enterprises that failed to conform to the sugar-control trend suffered a discount of nearly 50% in their forward price-to-earnings ratios. The main conclusion of this paper is that health policy announcements, as an external negative shock, will exert a significant negative impact on the stock prices of traditional sugary drink enterprises in the short term, but the duration of this impact is relatively short; the medium-to-long-term value recovery of enterprises depends on their strategic execution capabilities in transitioning toward sugar-free products.

Keywords

Sugar-Control Health Policy; Sugary Drink Enterprises; Abnormal Return; Event Study Methodology; Sugar-Free Transition

References

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