Voters in Boulder, Colorado and three cities in California — San Francisco, Oakland, and Albany — approved controversial new soda taxes on Tuesday. Sugar-sweetened beverages have been linked to obesity and diabetes, and these new laws are intended to fight back against the rising tide of these diseases spreading across the world.
In San Francisco, Oakland, and Albany, the new laws will level a one cent-per-ounce tax on beverages that contain an added-calorie sweetener and more than 25 calories in 12 ounces of liquid. This includes sodas, energy drinks, sweetened tea, and sports drinks. In Boulder, the tax is even steeper: two cents per ounce for beverages with at least five grams of an added-calorie sweetener in 12 fluid ounces.
Shoppers won’t be paying these taxes at the checkout registers — at least, not directly. Instead, the taxes are directed at beverage distributors, who are anticipated to increase prices for retailers and shoppers. If they do, it “could result in a price increase of 67 cents on a two-liter bottle, or $1.44 for a 12-pack,” The New York Times reports. But it’s possible that less than half of that price increase will be passed on to shoppers, according to a recent analysis. That means that soda taxes might actually need to be higher than a penny per ounce before we start seeing large changes in consumers’ behavior.
This has been an expensive fight for those on both sides, and one with especially high stakes for the soda industry, which is facing a 30-year low in soft drink consumption in the US. In San Francisco and Oakland, New York’s Michael Bloomberg poured millions into the pro-tax campaigns, and the American Beverage Association spent millions against them. The taxes are projected to raise $15 million for San Francisco in the 2017–2018 financial year, $6 million per year in Oakland, and $223,000 annually in Albany.
The four cities join Berkeley, which was the first in the US to pass the tax in 2014, the same year that a similar measure failed in San Francisco. Philadelphia followed earlier this year. The American Beverage Association is suing to stop that measure from taking effect — which is currently planned for January 1st, 2017.
The World Health Organization has been advocating for taxes that promote healthier diets to curb the spread of obesity and diabetes, but it warns that a tax won’t be a magic fix. Mexico passed its own soda tax in 2013, and saw soda sales fall by about six percent in 2014, and nine percent among low-income households.
But we don’t know yet whether or how Mexico’s tax and falling soda sales have affected rates of obesity and diabetes in the country. “The soda tax is part of a comprehensive strategy to reduce obesity and type 2 diabetes,” Dr. Juan Rivera Dommarco, director of the Mexican Research Centre in Nutrition at the National Institute of Public Health, said in a WHO report earlier this year. “The results in terms of a real reduction in obesity and increase in healthy consumption habits will not show immediately.”