National Consumers League

Fighting penny soda tax gets pricey

Sally GreenbergEditor's note: The measures discussed in this piece were approved on Election Day, 2016.

It’s hard to believe that corporate America would throw so much money fighting a penny-per-ounce tax on sodas, but that is exactly what’s happening in San Francisco and Oakland. The soft drink industry has thrown $50 million in efforts to fight this tax on sugar-sweetened drinks.

Sweetened beverages have been tied to diabetes, obesity, and tooth decay. Public health experts see measures to raise prices as a way to drive down consumption, which is the last thing Big Soda would want to promote.

These soda tax measures are proliferating. In June, Philadelphia adopted a soda tax, beating back a $10 million industry campaign petitioning it. Berkeley, CA passed its own tax two years ago. Boulder, CO is voting on a 2 cent tax today, and three California cities (San Francisco, Oakland, and Albany) will also have a sugary drink tax on the ballot. This is all happening as consumption of soda is slipping nationally.

These measures are similar: they would impose a tax of a penny per ounce on any drink with added sweetener, including soft drinks, iced teas, and smoothies. The taxes would be imposed on beverage distributors, not at checkout. Evidence from current soda taxes suggests price increases will be passed through to retailers, and, according to the New York Times, the price of a 2-liter bottle might increase 67 cents and a 12-pack of sodas would go up $1.44.

If the soda tax can achieve its dual goal: reducing consumption of sweetened drinks and using the proceeds for community and health initiatives, then this will be a success. NCL supports these efforts, and we wait eagerly to see whether both of these laudable goals will be achieved.