California Beverage Industry Fights Per-ounce Tax

The November election in Berkeley, California, and San Francisco has the beverage industry fighting against raising taxes on sugary beverages like soda and energy drinks. Those who support the tax claim it will reduce the sales of the sugary products, which will lead to better health in those who would normally consume them

Those who are taking online baking courses know that sugar is an important ingredient that can make or break a baked good. The amount of sugar and what kind it is greatly alters who your target diners are when it comes to how much and what kind of sugar they consume. The baking industry is feeling the effects of people searching for healthier sugar alternatives. The proposed beverage taxes are one example of sugar’s relationship with the community and show some reasons why and how the beverage industry is effected by people’s search for better sugars alternatives.

Industry opposition
According to Reuters, the American Beverage Association and its members have spent more than $2.1 million to fight the proposed 1 cent per ounce tax on sugary beverages. That’s $27 per California voter. The industry has spent $9 million in San Francisco, around $19 per voter, to fight the proposed 2 cent tax on sugary drinks. The new taxes could raise the price of a typical beverage by 24 cents.

Moves to stop the tax include billboards and filling mailboxes with anti-tax flyers. No U.S. city has passed a ballot measure like the ones in San Francisco and Berkeley. Michael Roberts, executive director of the Resnick Program for Food Law and Policy at the UCLA School of Law told Reuters that the beverage industry is worried that once one has passed, momentum will gather, making it easier to pass similar bills in other locations.

The vote
The Berkeley measure needs a majority vote to pass. San Francisco requires a two-thirds majority for the tax to take effect. Similar measures have been voted on in Telluride, Colorado, and fellow California cities El Monte and Richmond. None of the taxes were approved.

The beverage industry funded organizations like the Coalition for an Affordable City and the No Berkeley Beverage Tax group in response to the measures. Critics of the groups claim they are hiding the true sponsors of the message.

A soda tax went into effect in Mexico earlier in 2014 and PepsiCo said their quarterly volume declined 3 percent due to the tax, confirming the beverage industry’s fears that consumers will buy less soda if the tax is approved.

Supporters argue that the tax would reduce consumption of sugary beverages, which would help to fight diabetes and obesity. In a 2013 Harvard study, researchers found that increasing the prices of a 20 ounce soda by 20 cents, akin to the 1 cent per-ounce pproposed tax hike, caused a 16 percent sales drop.

Recommended Posts