The soda industry has a sly new strategy to head off taxes on its products — and it worked Tuesday in Washington state.
Voters in the state passed Initiative 1634, a ballot measure that makes it impossible for cities and counties to enact new soda taxes. (An existing soda tax in Seattle will still stand.)
But some voters might not have realized they were voting against soda taxes. The industry-led campaign “Yes! To Affordable Groceries” described the measure as “opposing new taxes on everyday grocery items, such as meats, dairy and beverages.” But state-level bans on food and beverage taxes increasingly seem to be an effective way for industry to curb the soda tax momentum that’s been building.
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As rates of obesity and diabetes, which have been linked to excessive soda consumption, rise, more and more US cities and counties and countries around the world have been turning to soda taxes.
The basic idea behind the taxes is this: Making drinks like soda more expensive through taxation helps reduce consumption, improves awareness of the health harms they carry, and nudges people to choose lower- or no-calorie beverages instead. To date, 40 counties and seven cities — including Berkeley, California, and Philadelphia — have implemented soda taxes, and more municipalities are currently considering them.
Preliminary research suggests these taxes do seem to curb soda drinking, and ding beverage makers’ bottom line at a time when soda sales are already flagging.
In an effort to prevent more taxes from being enacted, beverage makers are taking a page from the tobacco industry’s playbook and supporting ballot measures and state laws that block governments from passing new taxes on food and drink. But the trick is that these measures are framed as a way to help consumers avoid spending more on what they’re putting in their grocery carts.
And that’s exactly what happened in Washington last night.
“They’re calling it a grocery tax measure when nobody in the public thinks of soda when they think of groceries,” said Laura MacCleery, the policy director at the Center for Science in the Public Interest. “The ads have pictures of broccoli. But this was never about a broccoli tax. No one wants to tax broccoli.”
A similar measure failed in Oregon. Blame a lack of public health funding.
The American Beverage Association, whose members include Coca-Cola, PepsiCo, and Dr Pepper Snapple Group, came up with the tactic, and bankrolled it, as Politico and the New York Times reported.
All told, beverage companies spent $20.3 million on supporting the ban in Washington, according to the Center for Science in the Public Interest.
By contrast, public health groups and advocates opposing the measure had only $100,000 to spend on warning the public the measure.
Interestingly, a similar initiative was voted down in Oregon on Tuesday. But there, the spending discrepancy between the soda and public health campaigns wasn’t as large. The industry spent $5.7 supporting the measure in Oregon, while public health groups spent $3.4 million.
“There was money behind the opposition campaign in the state where it was voted down. In the state where the soda industry won, there wasn’t any funding to clarify to the public what was at stake,” MacCleery said. The difference in outcomes in the two states “is a difference where advocacy groups had the resources to stand up and explain to voters what the measure was about.”
“Money talks,” said Marion Nestle, a New York University professor and author of the new book Unsavory Truth. “As far as I can tell, the soda industry will stop at nothing to prevent communities from passing soda taxes.”
When asked for comment, the American Beverage Association referred Vox to the Yes! To Affordable Groceries campaign. Melissa Schwartz, a spokesperson for the group, said that voters were made aware of who was funding and supporting the initiative. “Passage of Initiative 1634 means working families and seniors on fixed incomes won’t have to pay more for groceries too,” the campaign said in a statement.
Michigan, Arizona, and California enacted similar measures earlier this year, also supported by beverage makers. In California, the American Beverage Association, the trade industry group for soda makers, framed that measure as a way to keep groceries, including soda, affordable. But again, no one was ever talking about taxing groceries.
Soda taxes are one of the more promising tools for curbing obesity
Health researchers have known for years that high-calorie, nutrient-poor beverages such as soda have been major contributors to the obesity epidemic. They give people big, quick doses of sugar with little accompanying nutritional benefit or satiety.
Other countries, such as the United Kingdom and Mexico, already have national taxation schemes in place. They each work a little differently, but they share a common goal: to raise the price of sugary beverages to drive down the amount people drink and, in turn, reduce the rate of obesity.
Data from Mexico and Berkeley — where taxes have been implemented in 2013 and 2014 — have shown declines in sales of sugary drinks. In Mexico, in particular, the reduction was greatest among low-income households, which also happen to be the groups most affected by obesity, according to a study published in BMJ in January. A new study on Berkeley, published in PLOS Medicine, found a 10 percent decline in soda sales one year after the tax was imposed.
They carry other important benefits cities may be able to reap
The money raised from the taxes can be used to support other obesity-fighting policies and raise revenue for cash-strapped communities.
In Berkeley, revenue from soda taxes goes to children’s health programs in low-income areas that are battling particularly high rates of childhood obesity. Philadelphia’s tax is funding an array of community and education initiatives, including universal pre-kindergarten classes and new community schools. Seattle’s tax is raising revenue aimed at increasing access to healthy food and reducing education disparities.
Soda taxes have also encouraged companies to change their manufacturing practices by offering more lower- and zero-calorie options.
Finally, they can raise awareness about the health harms of drinking what is essentially nutrient-bankrupt liquid sugar. Whenever a municipality is considering a tax, a media discussion typically follows suit — including a discussion about the health harms of soda.
Taxes also help shift social norms. Consider tobacco: Increasing the price of cigarettes through taxation was one of the biggest contributors to driving down the smoking rates.
But if the beverage industry keeps pushing laws that preempt soda taxes from ever seeing the light of day, fewer communities will be able to reap these rewards.
For now, CSPI’s MacCleery was hopeful about the future — though money to oppose these measures clearly matters. “We will eventually win this fight to ensure people understand the real cost of soda consumption for their health — but it’s going to be this back and forth and resources make a huge difference.”