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Philadelphia just became the first major city to enact a soda tax

Opponents of a proposed sugary drink tax demonstrate outside City Hall in Philadelphia, Wednesday, June 8, 2016.
Opponents of a proposed sugary drink tax demonstrate outside City Hall in Philadelphia, Wednesday, June 8, 2016.
(AP Photo/Matt Rourke)

Philadelphia's City Council approved 1.5 cent levy per ounce of both sugary and diet drinks on Thursday, an approach could be a model for other mayors across the US who have been trying to push through similar measures for years.

From attack ads to protests to disgruntled Teamsters, the tax was the subject of fierce lobbying and debate in the City of Brotherly Love.

Mayor Jim Kenney initially proposed a 3-cent tax on each ounce of soda, iced tea, and other sugary drinks in March. Soon afterward, ads criticizing the measure sprang up all over the city, appearing on TV spots and radio and even before films in movie theaters. (The City Council agreed in early June to modify the proposal by reducing the levy by half.)

The plan has had plenty of boosters, who've joined a broad coalition of the city's labor, health care, police, and religious communities. Part of the reason for the support is Kenney's novel approach to selling the idea. Instead of framing it as a win for public health and a loss for the soda companies, he's repeatedly argued that the tax would be an economic boon for the city, bringing in millions of dollars in annual revenue.

How the Philly soda tax will work

So far, Berkeley, California, is the only city in the US that has managed to pass a soda tax. Others — including New York City under Mayor Michael Bloomberg — tried and failed, buckling under intense opposition from food (mainly soda) companies.

It's been a long battle for Philadelphia as well — this is the third time in less than 10 years that council has weighed such a tax. "Both times, after intense lobbying from the soda industry, [the] Council rejected the proposal," Philadelphia magazine reported.

But the current proposal is different thanks to how Kenney has framed the issue.

"What we're looking to do is to take some of that profit, to put it back into the neighborhoods that have been their biggest customers, to improve the lives and opportunities for the people who live there," he said at a recent rally, according to NPR.

The tax will apply to all drinks with added sugar — soda, iced teas, energy drinks, sweetened coffee beverages — as well as diet beverages, in both bottle and fountain form. Alcoholic drinks and milk-based products will be excluded. 

According to the
Philadelphia Inquirer, the tax will add 18 cents to the cost of a 12-ounce can, and $2.16 to a 12-pack. In all, it's expected to bring an estimated $91 million to the city annually after it goes into effect Jan. 1.

Kenney says he intends to use the money raised through the tax to fund an array of community and education initiatives, including universal pre-kindergarten classes, building new community schools, and improving recreation centers, parks, and libraries throughout the city. (Margot Sanger-Katz has some essential reading on Kenney's strategy over at the New York Times.)

Even with this novel spin, getting the tax passed hasn't been an easy ride. Public health advocates like Bloomberg have been quietly pouring money into pro–soda tax ads to help Philadelphia lead the way. But soda companies have spent millions of dollars on ads to discredit the proposal. The local Republican Party has also spoken out against it, saying the tax will put an undue burden on poor families, driving up their grocery bills.

It's not clear how much soda taxes will impact health

sodas

(Shutterstock)

Health researchers have known for years that high-calorie, nutrient-poor beverages such as soda have been major contributors to the obesity epidemic. They give people big, quick doses of sugar with little accompanying nutritional benefit or satiety.

So the basic idea behind a sugary drink taxes is this: Making drinks like soda more expensive through taxation might help reduce consumption, improve awareness of the health harms they carry, and nudge people to choose lower- or no-calorie beverages instead.

Other jurisdictions — like the United Kingdom, Mexico, Denmark, and, again, Berkeley — already have similar taxation schemes in place. They each work a little differently, but they share a common goal: Raise the price of sugary beverages to drive down the amount people drink and, in turn, reduce the rate of obesity.

I asked several researchers who are studying how soda taxes impact public health whether this type of policy can really reduce obesity.

They all pointed out that it's hard to know that right now, since so few cities or countries have managed to get these policies into place (again, due to that fierce opposition from the soda industry).

Preliminary data from Mexico and Berkeley — where taxes have been implemented in the past two years — have shown declines in sales of sugary drinks. In Mexico, in particular, the reduction was greatest among low-income households, which also happen to be the groups most affected by obesity, according to a study published in BMJ in January.

But some researchers believe the taxes have real limitations in fixing a problem as complex as obesity.

For one, the taxes usually don't apply to all caloric drinks that people love. In the UK case, for example, pure fruit juices and sweet milk-based drinks, which can have just as much sugar as soda (or more), won't be taxed. So consumers will still have options that are potentially cheaper, but still calorie-dense, once the tax is imposed, said Roland Sturm, a senior economist and professor of policy analysis at RAND.

The taxes typically only add a few cents' cost to a beverage. "Don’t expect small taxes to make a big splash in reducing obesity," Sturm said.

coke soda
Soda sales have fallen in recent years. (Graphic by Javier Zarracina)

Marion Nestle, a New York University professor who wrote the book Soda Politics, said that it's also hard to disentangle the impact of taxes from the overall trend in declining rates of soda consumption. In the US, for example, soda consumption has been dropping since the late 1990s. In Berkeley, "consumption rates were low to begin [much lower than the national average] ... so measuring a further decline won’t be easy," she added.

What's more, sugary drinks are only one source of added dietary sugar, and taxes on them haven't yet been linked to marked health improvements, said Shu Wen Ng, an associate research professor in nutrition at the University of North Carolina who co-authored the BMJ paper. "It will be a while before we expect to see health effects — like weight change, metabolic changes — as these changes require persistent changes over time to occur."

Ng pointed out that the obesity epidemic crept up slowly and insidiously. Reversing the trend will take time. "It will also take more than just an sugar-sweetened beverage tax," she said.

Soda taxes can be helpful in other ways

Even if soda taxes don't immediately change health, they do have other benefits.

First, they can raise awareness about the health harms of drinking what is essentially nutrient-bankrupt liquid sugar. "Taxes generate a vast amount of media discussion of the effects of sugary drinks on health," Nestle pointed out.

Taxes also help shift social norms, said Sturm. Consider tobacco: Increasing the price of cigarettes through taxation was one of the biggest contributors to driving down the smoking rates. "Smoking rates didn't drop immediately, and taxation had a small effect on consumption immediately," he said.

But eventually the taxes had an effect, "and with fewer people smoking ... it becomes less acceptable to smoke, so it was a feedback loop." He said the same could happen with soda consumption.

The money raised from the taxes can be used to support other obesity-fighting policies. In Britain, revenue from the drink taxes will fund childhood obesity interventions, such as sports programs in primary schools. In Berkeley, the money goes to children's health programs in low-income areas that are battling particularly high rates of childhood obesity.

The tax may also encourage companies to change their manufacturing practices by offering more lower- and zero-calorie options — a trend that's already started.

"While a sugar-sweetened beverage tax will not be a silver bullet, if it results in even more moderate changes in obesity, that would be very welcomed by public health advocates," said Brian Elbel, an associate professor in popular health and health policy at the NYU School of Medicine. He added that the tax may be just one of the many policy tools in the toolbox.

Ng said she'd also like to see more regulation of how beverage companies market their products, to children and others.

There are also measures people outside of government can take to discourage soda drinking. In Britain, soda tax proponent and celebrity chef Jamie Oliver, for one, has been leading by example. He added a 15-cent tax on sugary drinks in his restaurants last year. The money raised goes to healthy eating education programs.

As Elbel said, "We have to keep looking for policies that can have even small but cumulative impacts."