- Bills banning local governments form levying taxes on food and beverages have been signed into law in Michigan and Arizona, according to Winsight Grocery Business.
- Despite Seattle implementing a soda tax of 1.75 cents per ounce this month, the soda industry is pushing for a statewide ballot initiative campaign in Washington state that would prevent other cities from implementing a similar measure.
- Since 2009, the soda industry has spent $48.9 million on soda tax opposition campaigns, Winsight noted, citing a November 2017 report by the Center for Science in the Public Interest. The industry's newest campaign is called "Yes To Affordable Groceries."
Since 2015 when Berkeley, California implemented a soda tax in an effort to reduce the consumption of sugary beverages, the controversial initiative has appeared in other places such as Philadelphia and briefly in Cook County, Illinois — the area, which includes the city of Chicago, overturned its penny-per-ounce soda tax after only four months of collection.
Soda giants PepsiCo, Coca-Cola Co. and Dr Pepper Snapple have blasted these measures as a money grab by municipalities, saying they unfairly singled out sweetened beverages when the intention was to improve public health by reducing sugar intake.
It's not a surprise that the soda industry — behind the American Beverage Association trade group — has gotten more active in the legislative process to prevent these taxes from being implemented in the first place. It's likely that soda makers would spend less money upfront to prevent a municipality from ever introducing a sugar tax then they would to fight to stop them once they're proposed, and the public criticism that results, or to deal with the aftermath in the form lower soda sales or job cuts.
It's evident that the efforts of the soda industry's campaign are beginning to pay off. Their biggest victory was in Cook County’s repeal of its penny per ounce tax. Across the country, residents in Santa Fe, New Mexico easily rejected a similar tax. Meanwhile, in the newest World Health Organization report on preventing non-communicable diseases, like obesity and diabetes, experts did not recommend taxes on sugar drinks. The study did note that a recommendation to tax sugary drinks was not included “despite broad support from many commissioners.”
Statistics have shown that soda taxes do not always generate as much revenue as anticipated because sales of the taxed item tends to drop dramatically. In Philadelphia, they dropped 40% in a matter of months. In 2016, a year after the Berkeley soda tax was implemented, overall soda sales fell 21%. That can be bad news for retailers who not only lose sales of soda, but customers who flee to other municipalities where they stock up on soda, and other grocery staples during their visit.
The fact that taxes may not be producing as much as lawmakers hoped may give soda makers some leverage. There's also the threat of job cuts. Since soda taxes have come into effect, Canada Dry Delaware Valley laid off a fifth of its workforce in Philadelphia, while PepsiCo cut dozens of job in the area. Even retailers are saying they are experiencing devastating sales losses.
With millions of dollars being spent every year to campaign against these taxes, the industry is taking a page out of the book of tobacco companies. They are restructuring their argument to revolve around groceries as a whole, explaining how taxing individual products increases the cost of living in the urban metropolises and can hurt working class individuals. After some early stumbles, it appears the soda industry has found an effective way to turn the tide in its favor.