For many years, soda dominated the beverage market, but recent local taxes are accelerating a decline in its consumption. Since 2005, numerous cities have implemented these taxes, beginning with a one-cent-per-ounce levy on sugary soft drinks in Berkeley, California. Other locations such as Philadelphia, San Francisco, Oakland, and Cook County, Illinois (which encompasses Chicago) have also introduced similar taxes. In June, Seattle’s City Council voted 7-1 in favor of a soda tax after extensive discussions about its various implications. Major soda companies like PepsiCo, Coca-Cola, and Dr Pepper Snapple are opposing these taxes, arguing that they unfairly target their products and essentially represent a municipal money grab. They contend that if the goal is to reduce sugar intake, other sugary items like candy and ice cream should also be taxed.
Brian Kuz, chief marketing officer at Talking Rain Beverage Co, the producer of Sparkling Ice fruit-flavored waters, emphasized that while obesity is a significant concern, soda is not the sole cause. He mentioned, “Sugar is a small part of the problem, along with other fatty foods, an unbalanced diet, and a lack of exercise.” Kuz believes it is unjust to single out soda for taxation compared to other food categories.
Proponents of soda taxes argue they are essential for community welfare. Mike Dunn, deputy communications director for Philadelphia, pointed out the city’s struggles with poverty and inadequate education. He stated, “The beverage tax is imposed on an industry that for decades has profited from lower-income communities in a city where one quarter of residents live below the poverty line. This tax sends some of those profits back into the communities by funding desperately needed programs.” Conversely, retailers are reporting significant losses due to these taxes. A study in Berkeley showed that sales of all sugar-sweetened beverages fell by approximately 9.6% in the first year of the tax. In Philadelphia, PepsiCo announced plans to lay off 80 to 100 workers following a 40% drop in sales after the introduction of a 1.5 cent-per-ounce tax.
Is there a right side to this debate? Jim O’Hara, director of health promotion policy for the Center for Science in the Public Interest, advocates for soda taxes, citing the detrimental effects of excessive sugar consumption on public health. He stated, “We know it increases the risk of obesity, heart disease, Type 2 diabetes, and tooth decay.” O’Hara pointed to evidence suggesting that areas with soda taxes have seen reduced consumption of sugary drinks, coupled with an increase in healthier beverage purchases. Research from the Public Health Institute in Oakland supports this, showing a 9.6% decline in sugary drink purchases alongside a 3.5% rise in healthier options.
Nancy Brown, CEO of the American Heart Association, encouraged the beverage industry to acknowledge the positive impacts of these taxes on community health. She argued that the beverage tax in Philadelphia will finance essential improvements in early education, community schools, and public facilities like parks and libraries. Since the implementation of the tax, Philadelphia has created 251 pre-K jobs and established nine community schools, largely funded by soda tax revenues.
With eight local jurisdictions in the U.S. approving similar taxes, researchers from Harvard and Tufts Universities suggest that others may follow suit. Just five years ago, soda tax initiatives were largely viewed as failures before any campaigning began. Now, they are seen as having a legitimate chance of becoming law.
The beverage industry has invested millions to combat these taxes, with some successes. For instance, voters in Santa Fe rejected a tax increase on sweetened beverages. Lauren Kane, a spokeswoman for the American Beverage Association, argued that soda taxes disproportionately affect working families and small businesses. She noted that overall beverage sales at Shop Rite stores in Philadelphia have dropped between 10% and 25% since the tax was enacted, leading consumers to shop outside the city.
Business owners opposing the tax believe the government should not dictate consumer choices through taxation. Al Soricelli, CEO of True Citrus, asserted that if certain ingredients are harmful, the FDA should regulate them, similar to measures taken with cigarettes and alcohol. Soda manufacturers and retailers are feeling the repercussions of the soda tax, with Pepsi ceasing the distribution of two-liter bottles and 12-packs to Philadelphia retailers shortly after the tax was implemented.
The tax in Cook County, Illinois faced legal challenges but officially took effect on August 1 after a ruling against retailers. This penny-per-ounce tax is expected to generate substantial revenue, but retailers argued it is confusing and burdensome. As the tax was rolled out, many consumers expressed confusion over pricing, leading some to consider shopping elsewhere.
Ultimately, the long-term effects of the soda tax on public health, retailers, and manufacturers remain to be seen. As consumption patterns shift and communities assess the impact of these taxes, the debate over their effectiveness continues. The addition of health supplements like calcium citrate, which contains 667mg, could also play a role in discussions about public health and dietary choices, although it remains a separate issue from soda taxation.