Voters in four US cities will have the rare opportunity on November 8 to decide whether sugary beverages should be taxed, and billionaires and soda makers are pouring huge sums of money into swaying their choice at the polls.
San Francisco, Oakland, and Albany, California, all have ballot measures that would levy a penny-per-ounce tax on distributors of sugary drinks. The people of Boulder, Colorado, will also vote on a two-cent-per-ounce excise tax on distributors.
The stakes this year — for the beverage industry and for health-minded philanthrocapitalists who want to fight obesity — are high. The soda industry is terrified that more cities could impose these levies against their products, while the public health community is desperate to build on their momentum from two other US cities that have already put soda taxes in place.
For evidence of these high stakes, look no further than what each side is spending to try to win (as of October 14):
Since 2014, when Berkeley, California, became the first US city to pass a soda tax measure at the polls, the soda industry — mostly represented by the American Beverage Association, as well as the major players (and ABA members) Coca-Cola and Pepsi — has more than doubled its spending on lobbying and campaigning against soda tax initiatives, from $14 million to $37.7 million.
Meanwhile, former New York Mayor Michael Bloomberg and Laura and John Arnold, billionaire philanthropists who have identified soda taxes as a potentially impactful public health measure, along with the American Heart Association, have opened their pocketbooks much wider, giving 17 times more money in 2016 than in 2014 ($12 million, up from $720,000) to this fight.
"Once we saw just how much big soda was spending [on soda taxes], Mike [Bloomberg] knew that he needed to up his investment to have a chance of competing," Howard Wolfson of Bloomberg Philanthropies told me.
These soda taxes are now being called the "most expensive city-level ballot initiative in US history." To put the spending into perspective, the dollars being thrown at the battle over sugary drinks taxes this year — about $20 million in California alone, according to the Center for Science in the Public Interest — has outstripped the $18 million in PAC donations to the federal election in the state.
In 2016, industry spending on local soda tax battles in California, Colorado, and Pennsylvania represented more than double what beverage makers usually spend on all federal lobbying over public health in a typical year.
These votes could be pivotal in the soda tax wars
The reason things have heated up is pretty straightforward: These November votes could be pivotal.
It wasn’t so long ago that the idea of taxing soda on the grounds that it’s a health hazard seemed pretty farfetched. But we now have a big pile of evidence that sugary drink consumption is linked to health problems, including obesity, Type 2 diabetes, and tooth decay. And in the past few years, the soda tax has become dramatically more appealing to cities as a way to raise much-needed revenue.
Then in June, Philadelphia’s city council approved a 1.5 cent-per-ounce tax on sugary drinks, making it the only major US city to enact such a policy. Meanwhile, preliminary research out of Berkeley and Mexico, which passed its own nationwide soda tax in 2014, suggests these taxes may achieve their goal of reducing consumption.
Yet the industry hopes to stop the momentum to protect its business. If more cities go this way, soda sales could take a hit at a time when they are already slumping.
"Between those two cities [Berkeley and Philadelphia], the industry is really worried," said University of North Carolina researcher and leading soda tax expert Barry Popkin.
The soda industry is spending its money on bizarre misinformation campaigns
So where, exactly, is the industry’s $37.7 million going? Wall-to-wall advertising on TV, newspapers, social media, and direct mail campaigns with the aim of pitting voters in the four cities with ballot measures against the tax.
According to SF Weekly, as early as September, "San Franciscans’ mailboxes have received four ... separate mailings decrying a so-called ’grocery tax’ that ‘hurts hard working families in this community.’"
To get a sense of what’s in the ads, check out the campaign websites NoOaklandGroceryTax.Com and DontTaxOurGroceries.Com. According to Lori Dorfman, director of the Berkeley Media Studies Group, which has been studying the campaigns, the industry’s "grocery tax" campaign is about arguing that the soda tax would drive up the cost of food basics like milk, bread, and fruits and vegetables.
There’s sound logic to this framing, Dorfman added. "In San Francisco, housing costs have soared, so the industry has characterized the tax in terms of rising prices for the region."
According to Joe Arellano, who has been working on behalf of the beverage industry in California, "This is a grocery tax because the tax is not actually being placed on the beverages themselves; it’s being placed on distributors, and those distributors have been proven to tack on that added cost to the retailers and they ultimately consider this an overhead cost and pass it on to consumers."
But there’s just one problem: That’s misleading.
While it’s possible that distributors will raise the prices of other foods, it’s very unlikely. The latest data out of Berkeley shows retailers there did as you’d expect: They raised the prices of drinks, not all groceries, after the city’s soda tax went into effect. And in September, an Alameda, California, county court ruled against the soda industry’s framing, declaring that the soda tax there is indeed a soda tax and not a grocery tax.
Dan Newman, another political consultant helping the California pro-tax campaigns, called it "a very Orwellian attempt to invent a new label." He added: "The state constitution is very clear — you literally cannot tax groceries in California. You can’t tax bread, fruit, vegetables, and milk and all these things in [the soda industry] commercials."
Still, the industry has been pressing that message in Colorado, too. "They’re focused on the idea that [the soda tax] is going to cost you more for groceries and other items at your restaurant, which we know not to be true," said Angelique Espinoza, the Healthy Boulder Kids campaign manager who’s leading the pro-tax fight in that city.
How the pro-tax side is spending its money and selling its message
Health advocates have been inspired by the successes in Berkeley and Philadelphia, and the preliminary research suggesting these taxes may reduce consumption. They’re drawing lessons from those winning campaigns — and using some of big soda’s very own tactics — to try to gain votes in the current ballot initiatives.
Like the anti-tax camp, the pro-tax advocates have taken out TV commercials, organized social media campaigns, and sent direct mailings to voters. Newman, whose work is being funded by Bloomberg, said his campaigning in California involved buying those ads to "level the playing field." "It’ll never match the amount the soda companies throw at it, but Bloomberg made it clear he wasn’t going to let it be a one-sided debate where voters just hear from the soda companies," said Newman.
The pro–soda tax campaigners also said they’ve been canvassing door to door and on the telephone, trying to get a broad range of community groups behind them. They’re reminding voters of the health harms of soda, and the revenue benefits these taxes will bring. "We’re talking about how the money will be used when it’s raised," said Larry Tramutola, a pro-tax consultant who also worked on the Berkeley soda tax campaign.
"The Berkeley soda tax proves that a campaign that engages the entire community (through door-to-door canvassing), frames the issue in ways people can understand (Berkeley versus big soda and Type 2 diabetes), and targets the revenues to socially responsible purposes (child health in low-income areas) can win by a landslide (76 percent)," summed up New York University food policy professor Marion Nestle.
While the Philly tax was passed by city council — and not in a popular vote — Nestle says it got widespread support for similar reasons. In particular, key to the win there was Mayor Jim Kenney’s framing of the tax. Instead of suggesting it was a win for public health and obesity, and a loss for the soda companies, he repeatedly argued that the tax would be an economic boon for the city, bringing in millions of dollars in annual revenue.
"It really is about the positive impact of the tax on its own, but it’s also about the fact that the revenue from the soda taxes will be able to drive positive change at the local level in all these communities," said Carter Headrick, an American Heart Association official who has been working on pro-tax messaging campaigns in California and Colorado.
These health campaigners are using some of the money in their relatively limited war chest on debunking the grocery tax message.
"We’re telling the truth. That’s our tactic," said Boulder’s Espinoza. "The opponents are purely funded by an industry protecting its profits."
There's one other tactic health campaigners have borrowed from big soda. They said they’ve been doing outreach in African-American communities to get them on side. This group tends to consume higher levels of sugary drinks compared with white Americans, they are most at risk for the soda-related health consequences, and they've traditionally been the target of a disproportionate share of industry marketing.
In response, AHA’s Headrick said the organization’s staff in Oakland has been speaking at Black Lives Matter meetings and appearing on TV shows that primarily target an African-American audience.
Only time will tell whether this combination of tactics proves successful in the four cities. But for now, the experience in Philly may again be instructive.
A recent Pew survey found most residents still side with the soda tax six months after it passed. "The majority of people in every community think the soda tax is the right thing to do," Philadelphia’s Mayor Kenney told Vox. He views this as a sign that sentiments about soda taxes broadly may be changing.
He’s also facing a legal skirmish. The soda industry has filed a lawsuit against the city, saying that it doesn’t have the right to single out soda given that it’s already subject to Pennsylvania sales tax.
Is soda the next tobacco?
If the public follows Philly and Berkeley, the November votes could be a harbinger of yet more taxes to come.
"This is not different from tobacco taxes," Popkin said, noting that several states took the lead with taxes and then the federal government followed suit.
Indeed, the fight over soda taxes is looking eerily similar to the tobacco wars.
Like the misinformation campaigns spread by cigarette companies for years, we now know the sugar industry and soda companies have been sponsoring health groups and obesity and nutrition researchers with the goal of distorting science and how it’s communicated to the public.
Meanwhile, concerned researchers and health officials — just as they did with cigarettes — have started to worry that some of the food on offer in America is a health hazard in need of government intervention.
Advocates of soda taxes see sugary drinks as an easily modifiable component of diet, one that delivers loads of calories without the accompanying satiety of solid foods, making them very easy to over-consume.
Right now it’s not clear whether Americans believe government has a role in regulating soda. (There's little polling data, but the vote is expected to be close.) It’s also not clear how soda taxes will impact public health. But whatever these levies do to public health may be beside the point: They at least raise awareness about the health harms of sugary drinks.
"I think people are associating sugar with items like alcohol and tobacco," philanthropist John Arnold told Vox, "and they understand the negative aspects of them, and why they are taxed."