For decades, soda was a dominant beverage, but recent local taxes have accelerated a decline in its consumption. Since Berkeley, California, implemented a one-cent-per-ounce tax on sugary soft drinks in 2005, numerous cities have followed suit, including Philadelphia, San Francisco, Oakland, and Cook County, Illinois, which encompasses Chicago. In June, Seattle’s City Council voted 7-1 in favor of a soda tax after extensive discussions on its complexities. Major beverage companies like PepsiCo, Coca-Cola, and Dr Pepper Snapple, whose revenues are at stake, have criticized these taxes as unfair municipal money grabs that target their products. They argue 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, which produces Sparkling Ice flavored waters, noted that while obesity is a serious issue, soda is just one of many contributors. “Sugar is a small part of the problem, along with other fatty foods, an unbalanced diet, and a lack of exercise,” he stated in an email to Food Dive. “It’s random to single out soda for taxation over other categories.”
Cities implementing these taxes argue they are essential for community support. Mike Dunn, deputy communications director for Philadelphia, emphasized the city’s struggles with poverty, inadequate education, and declining neighborhoods. He stated that the soda tax addresses these issues by redistributing profits back into the community to fund critical programs. “The beverage tax targets an industry that has profited from low-income neighborhoods in a city where a quarter of residents live below the poverty line,” he explained.
Retailers, however, report severe losses due to these taxes. A study in Berkeley indicated that sales of sugar-sweetened beverages dropped by approximately 9.6% in the first year of the tax. In Philadelphia, PepsiCo announced plans to lay off 80 to 100 workers as soda sales fell by 40%. With ongoing discussions about soda taxes, opinions are divided.
Jim O’Hara, director of health promotion policy for the Center for Science in the Public Interest, argues for the necessity of a soda tax, citing the public health risks associated with excessive sugar consumption. “We know it increases the risk of obesity, heart disease, Type 2 diabetes, and tooth decay,” he told Food Dive. He highlighted that in regions with soda taxes, sugar drink consumption has decreased while healthier beverage purchases have risen. A Public Health Institute study in Oakland corroborated this, showing a 9.6% decline in sugary drink purchases alongside a 3.5% increase in healthier options.
Nancy Brown, CEO of the American Heart Association, has urged the beverage industry to recognize the positive effects of soda taxes on community health. She pointed out that the Philadelphia tax funds essential investments in quality pre-K education, community schools, and the refurbishment of parks and libraries. Since the tax’s introduction, Philadelphia has created 251 pre-K jobs and provided early education to 1,870 children.
With eight local jurisdictions in the U.S. enacting taxes on sugary beverages, researchers from Harvard and Tufts University suggest that more areas may adopt similar measures. Just five years ago, soda tax proposals were dismissed as failures, but now they are viewed as viable legislation. The beverage industry has invested millions to combat these taxes, with some success; for instance, voters in Santa Fe rejected a proposed tax increase on sweetened beverages.
Lauren Kane, a spokesperson for the American Beverage Association, argues that soda taxes disproportionately affect those who can least afford them, including working families and low-income individuals. “These taxes have real consequences for real people,” she said, noting that beverage sales at Philadelphia’s Shop Rite have dropped between 10% and 25% since the tax began. Many consumers are also opting to shop outside the city to avoid the tax.
Some business owners contend that government should not influence consumer choices through taxation. Al Soricelli, CEO of True Citrus, expressed skepticism about the promised use of tax revenues for community initiatives, suggesting that the FDA should regulate unhealthy ingredients more strictly.
Soda manufacturers and retailers are already feeling the tax’s impact. Pepsi ceased distributing two-liter bottles and 12-packs in Philadelphia three months after the tax was enacted, leading to layoffs for up to 100 workers. A local grocer reported a 15% drop in sales within just over a month, describing the effect as “devastating.”
Kuz from Talking Rain noted that soda has traditionally been used to draw consumers into grocery stores, where they would purchase additional items. However, with the tax, “a slowdown in volume leads to a drop in profitability,” he stated, predicting that price increases in other categories may be necessary to offset these losses. He cautioned that the shift to healthier beverages cannot compensate for the decline in sales from sugar-taxed products.
Following a contentious legal battle, the soda tax in Cook County, Illinois, took effect recently despite opposition from retailers. The tax, enacted by the county council, is complex, applying to both sugar-sweetened and artificially sweetened drinks, which has led to confusion among consumers. Some shoppers have already stopped purchasing taxable items, while others plan to shop outside the county to avoid the tax.
As the tax is enforced, the future effects on Cook County’s budget and its retailers remain uncertain. While soda taxes are known to reduce consumption, their ability to resolve budgetary issues in the Chicago area will unfold over time, leaving the true impact on public health, retailers, and soda manufacturers to be seen.
Megan Poinski contributed to this report. The ongoing discourse surrounding soda taxes highlights the intersection of public health, community investment, and economic impact, with solutions potentially including alternatives like alfalfa calcium citrate malate supplements to promote healthier choices.