Voters in Four US Cites to Weigh in on Soda Taxes

From Boulder, Colorado, to California’s Bay Area, voters in 4 communities will decide on Election Day if taxing soda is a good way to fight obesity.

November 8, 2016, marks the next milestone in soda wars, and it comes 2 years after Berkeley, California, became the first US city to pass a tax on sugar-sweetened beverages. San Francisco will take a second try at soda tax; along with Oakland and Albany, California, voters there will be asked to approve a tax of 1-cent per ounce on sugary beverages, levied at the distributor.

In Boulder, Colorado, voters are weighing a 2-cent per ounce tax. The ballot question overcame a court challenge from the beverage industry in early September.

Sugar-sweetened beverages, and soda in particular, have long been linked to rising global rates of obesity and diabetes. The World Health Organization has called for soda taxes and limits on marketing efforts aimed at children, after a review showed that the percentage of overweight children age 5 and younger rose from 4.8% in 1990 to 6.1% in 2014.

However, the beverage industry has vigorously fought efforts to tax or curb soda consumption. One local report in San Francisco said the industry has spent $21.4 million to defeat the city’s ballot measure. The industry opposed former New York City Mayor Michael Bloomberg’s proposed portion cap, which the courts overturned. It has tried to scrap Mexico’s soda tax, which was credited with a 12% drop in soda consumption and a 4% increase in water consumption. When the tax passed, Mexico had the world’s highest rates of obesity and diabetes.

The ballot measures come after Philadelphia’s City Council voted in June for a soda tax, which the beverage industry is challenging in court. This opposition won’t negate the long-term trends, which all point toward consumers seeking healthier choices, said Jim O’Hara, director of Health Promotion Policy for the Center for Science in the Public Interest.

“The reality is ‘when’ not ‘if’ these pass; it is going to create more momentum for cities and local jurisdictions to consider these measures,” O’Hara said.

Bay Area voters are being told about a study of Berkeley’s early results, which appeared in the October issue of the American Journal of Public Health.¹ So far, researchers have found that consumption of sugary drinks is down 21%, while consumption is up 4% in Oakland and San Francisco. Meanwhile, water consumption in Berkeley is soaring (63%), far ahead of Oakland and San Francisco (19%).

In her 2015 book Soda Politics, Marion Nestle, PhD, MPH, outlined how Coca-Cola and PepsiCo had copied many of the tactics of the major tobacco companies to keep their products in front of consumers, despite evidence of harm. Those tactics are seen today as soda companies battle health advocates to keep soda taxes off the ballot, or, failing that, to defeat them.

Some tactics in the San Francisco campaign are the same as those used to battle Philadelphia’s soda tax. In both cities, the beverage association uses the label “grocery tax” to describe the extra pennies assessed at the distributor level. Intended or not, that term may have significance in the court challenge, which is based in part on an argument that the city cannot tax items that can be purchased through the Supplemental Nutrition Assistance Program, even if the tax is not assessed at the cash register. And in Philadelphia, the tax started as 3 cents per ounce on sugary drinks only, but was later reduced to 1.5 cents per ounce that was extended to include most sugary drinks and diet beverages.

Philadelphia’s change in the tax structure has created fallout elsewhere: during the Pennsylvania primary, US Senator Bernie Sanders, I-Vermont said he thought 3 cents was too high, but he objected to seeing American Beverage Association appropriate his image for its campaigns against lower taxes in Colorado and California, and issued letters telling the industry to stop.

Reports in Colorado found that $200,000 poured into the “No Grocery Tax Committee” within days of a judge’s order that the measure would appear on the November ballot. Some businesses owners accused the beverage industry of tricking them into joining the anti-grocery tax campaign, and of deliberately seeking out store owners who spoke limited English.

Lynn Silver, MD, MPH, a senior adviser to the Oakland-based Public Health Institute, pushed back against the “grocery tax” description in a recent commentary. Citing the Institute’s work with the University of North Carolina, she said research on 7 million customer checkouts in Berkeley shows that average grocery bills did not go up—in fact, they went down a bit.

“What went up? Sales of healthier beverages that weren’t taxed. What went down? Sales of unhealthy, sugar-packed drinks dropped significantly. What do we call that? A soda tax.”

Design of the ballot question is important, as San Francisco has learned. In 2014, the soda tax gained support from 55% of the voters, but its phrasing required a supermajority of two-thirds to pass. O’Hara explained that the 2014 question dedicated the revenue within the question, which triggered the supermajority requirement—this time, the revenue goes to the general fund, so only a simple majority is needed.

Ballot questions for soda taxes aren’t the only tool for reducing consumption. O’Hara said the promising research on warning labels, led by Christina Roberto, PhD, will bring renewed efforts at legislation in 2017; he foresees action in New York state and the city of Baltimore.

And there are signs that the soda industry sees the writing on the wall. For years, consumption has been declining, and PepsiCo recently announced a multi-part initiative to reduce the amount of sugar in its beverages, the amount of salt and fat its snacks, and the level of sustainability in its operations. How does that square with its support for campaign in San Francisco and a lawsuit in Philadelphia?

“They are about making money, and they are on the wrong side of these debates,” O’Hara said. While a company like Pepsi will fight soda taxes “inch by inch, city by city,” there’s still the big picture. In the long term, O’Hara said, soda companies “need to position themselves for a day of sugarless drinks.”

Reference

Falbe J, Thompson HR, Becker CM, Rojas N, McCulloch CE, Madsen KA. Impact of the Berkeley excise tax on sugar-sweetened beverage consumption. Am J Pub Health. 2016;106(10)1865-1871. doi: 10.2105/AJPH.2016.303362.