Transcript
Why Is It So Hard to Tax Soda? by Tove Danovich Dec 9, 2015, 1:00p Berkeley, California beat the well-funded soda lobby. It could happen again. The city of Berkeley, California was plastered with advertising urging residents to vote for or against "Measure D." In the months leading up to November of last year, organizations opposed to the measure went so far as to purchase most, if not all, of the available advertising space at the city's two major BART metro stations. They paid canvassers and distributed fliers. All together, those opposed spent a reported $2.4 million to try to defeat the measure. The hot issue prompting the large political display wasn't to promote a candidate for public office or vote on a more controversial subject like gun control. Measure D was about soda — specifically, whether Berkeley would become the first city in the United States to pass a $0.01/ounce tax on the sugar-sweetened beverage. What has kept so many other cities from passing soda taxes? Soda taxes had been attempted before in Seattle, New York City, Philadelphia, and many others. And all of them failed. Those for and against the Berkeley soda tax knew that this could be the final test for the measure — if soda taxes couldn't pass in this uber-liberal university hub, they were unlikely to be implemented anywhere. But despite, or perhaps because of, the fierce lobbying and advertising by the American Beverage Association and other anti-Measure D advocates, the soda tax passed with 75 percent of the vote. So what has kept so many other cities from passing similar measures? Is Berkeley just a liberal unicorn, or were the techniques used by Yes on D organizers more effective than those used elsewhere? What's the Deal With Soda Tax? To fully explain the difficulty of passing these measures, it's important to understand the reasoning behind most soda taxes. This is not just a way for cities to make some extra income; soda taxes are, in essence, a "sin tax." Placed on bad-for-you products like alcohol or tobacco, the main goal is to raise prices enough to lower consumption. The reason health advocates and other groups are singling out soda is because of the rising levels of obesity in the United States (and many other countries). Currently more than one-third of all U.S. adults and one-sixth of all children are considered obese. Obesity has been associated with a number of serious — and largely preventable — illnesses like heart disease, diabetes, and even cancer, with estimated annual costs of treating obesity in this country ranging from $147 to $200 billion each year. As food policy expert Marion Nestle writes in her new book Soda Politics, "sugary drinks collectively account for fully half — yes, half — of all sugars consumed in the United States." Sodas in particular, she adds, represent one third. Sugar, as you may recall from the food pyramid and lessons from mom, is not all that good for you in large quantities. It provides calories and energy (or sugar crashes) without the nutrition to go along with it, prompting people to consume more than they would if dining on substantial foods alone. Coca-Cola, as Nestle notes in her book, has listed obesity as the primary risk to the company's bottom line in its SEC filings every year since 2003. As a direct assault on the soda industry, it's not a surprise that corporations and lobbying groups have worked hard to prevent these taxes. A sin tax on soda doesn't just mean potential loss of revenue, but loss of reputation as well. No product — especially one commonly consumed by children and teens — wants to be put in the same category as alcohol or tobacco. Why Lobbying Matters Even without taxation, Americans as a whole are already drinking less soda. Earlier this year, the Wall Street Journal reported, "U.S. per-capita consumption of carbonated soft drinks fell to its lowest level since 1986." By 2016, industry experts predict consumers will be purchasing more bottled water than soda. (Of course, bottled water is also a source of revenue for beverage companiesm though at much lower profit margins.) Soda taxes or caps on soda sizes (as Michael Bloomberg unpopularly tried to pass in New York City) would only further cut into the beverage industry's falling profits, and as a result, they lobby against these issues vigorously. In years when Congress or local governments are considering measures — like the federal soda tax briefly on the table in 2009 —lobbying spending by the American Beverage Association (ABA) rose from $700,000 in 2008 to $19 million. Collectively, Nestle notes, the ABA, Coca-Cola, and PepsiCo "spent at least $70 million to defeat soda tax initiatives from 2009 to 2012." Money doesn’t just influence elected officials, but local community groups, as well. This money doesn't just influence elected officials, but local community groups as well. The small price increases associated with soda taxes are often framed as an attack on the poor, who drink more soda and are more affected by the cost of goods. The soda industry has given large donations to the NAACP, the National Association of Hispanic Nurses, and other minority organizations who have later spoken out against soda taxes and similar initiatives. Leading up to San Francisco's soda tax vote, the Harvey Milk LGBT Democratic Club received a $45,000 donation from the ABA. They later publicly opposed the tax. While lobbying is often seen as a numbers game — big business gets its way because they spend more than the little guy — it's really about "shaping information," not giving gifts, says Lee Drutman, author of The Business of America Is Lobbying and senior fellow of the political reform program at New America. Frankly, "people making policy decisions are dealing with a ton of issues which are pretty complicated," Drutman explains. "They can only spend limited time on any issue and their staff tend to be stretched pretty thin." Lobbyists for the beverage industry are often former politicians who understand not only how to get meetings with the right person, but also how to make a convincing argument. If politicians (and even community leaders) don't have time to do their own research, trained lobbyists are there to do it for them. And, of course, the more people who an organization is able to reach, the better. "It's about building large coalitions and activist networks, funding a lot of research, and getting op-eds placed in various papers," Drutman says. But these are all tactics that underfunded activists can also do, though it's harder when you're working for little to no payment. In Berkeley, this exact playbook seems to have been the key to the soda tax's success. How Berkeley Got It Right Twenty-four months before the 2014 election day that would decide on Measure D, soda tax advocates were already gathered together. "Like many other communities, we have been working on nutrition education and food systems education in Berkeley for many years," says Martin Bourque, executive director at yhe Ecology Center, the "anchor nonprofit organization" for the Berkeley vs. Big Soda campaign. Determined to learn from the failures of similar policy efforts, they focused on starting outreach early and organizing disparate Berkeley communities in favor of taxing soda. Bourque has a long list of strengths that helped Berkeley vs. Big Soda: nonprofits already knew each other and had worked together through the Berkeley food policy council; the school district had a strong nutrition education program; the health disparities in the community were both known and well publicized; and they mobilized support from every facet of the community — religious organizations, the NAACP, Latino organizations, and even the YMCA. "It's very hard for Big Soda to claim that [soda taxes] are against minority interests when the NAACP says they're for it," Bourque says. Another benefit was that few organizations that serve communities of color were receiving significant funding from the soda industry. But despite Berkeley's reputation for being both politically engaged and very liberal, Bourque believes other cities could easily follow in their footsteps. In one of the final spending tallies, Big Soda outspent those in favor of the soda tax by seven-to-one. The arguments made by the soda industry in Berkeley as well as its "playbook" haven't changed much from city to city, and advocacy groups are in a good position to find ways to counter them. Even the advertising plastered throughout the city became another vote in favor of Berkeley vs. Big Soda. "To see the difference between every paid space being taken over by Big Soda but every lawn sign in favor of the tax — it was very stark," Bourque says. He believes that the organizers who want to pass a soda tax now will have the advantage of "seeing what we did and knowing it can be done." He adds, "2016 will be an interesting year." Though it's still unclear how many states and cities might attempt to pass soda taxes in the next elections, the consensus seems to be that more are on the way. Local advocacy groups planning to attempt a soda tax are likely trying to keep it under wraps to prevent money from opposing groups from flowing in too early. Juan Rivera, director of the Center for Nutrition and Health Research at the National Public Health Institute in Mexico, told Politico that he believes more U.S. cities will pass sin taxes on soda in the next five years. On January 1, 2014, Mexico implemented a soda tax throughout the country, making it the first nation to do so. If the United States joins its southern neighbor in making soda tax a national movement, it's likely even more countries will jump on board. But Are There Any Reasons Not to Tax Soda? According to Lauren Kane, senior director of communications in policy and public affairs for the ABA, soda taxes have "failed over 30 times since 2008." She explains that the public doesn't like them, and adds that there's "no proof that beverage taxes improve public health." Arkansas and West Virginia, which both have longstanding soda taxes, are some of the most obese states in the country, Kane says. Of course, Jim Guy Tucker, governor of Arkansas when the state passed its soda tax in the early '90s, writes that the measure was never intended to fight obesity — it was simply to raise taxes for Medicaid. The purpose of West Virginia's tax was also to raise revenue. As a result, both of them are far lower than the penny-per-ounce tax passed in Berkeley. West Virginia's, for example, is only one cent for every 16.9-ounce soda. The only way for a soda tax to reduce obesity is if it leads to lowered consumption of soda. For this to happen, prices have to be raised enough that customers "feel it" and be implemented in stores so bottlers or beverage companies can't absorb the price increases to keep people buying. Even then, people might still switch from soda to other high-calorie drinks, making no difference on calories consumed. While the soda industry's emphasis on exercise and education as the solution to obesity is underwhelming, there's at least one argument against soda taxes that holds up to scrutiny: They might just be a band-aid for a bigger issue. "It's a terrible idea from a policy perspective to tell people what to eat or not to eat," says Baylen Linnekin, the executive director of Keep Food Legal, a "membership organization devoted to food freedom." Linnekin is firmly against soda taxes because ofthe double burden they place on taxpayers. In essence, the government makes soda cheap by subsidizing sugar producers and corn growers (whose products can be turned into high fructose corn syrup), then soda taxes penalize consumers who want to purchase those cheap products. "Why make us pay taxes to give to industries who shouldn't get our money but not let us buy products the government encourages us to buy?" Linnekin asks. It's a fair question. The government makes soda cheap by subsidizing sugar producers and corn growers. For those who have seen how hard it is to pass a small city tax, the thought of reversing decades-old farm policy that would change our entire agricultural economy is mind-boggling. A system of band-aids may not be perfect, but at least they'd start some change today. Looking into the future, it's impossible to guess whether the quick-fixes would ultimately create more problems, or end the root causes of poor diet and obesity once and for all. Linnekin explains that many healthy food advocates seem to be of a mindset that sin taxes on certain foods are an easy way to punish "big food" or "big soda." By hitting them in their revenue streams, maybe it can. But is that really the point? "The ultimate goal of any intervention should be reasonably related to making people healthier," says Linnekin. And the best way to do that might be to get rid of the laws and policies that gave us so much cheap, unhealthy food in the first place.
