Study Suggests First Soda Tax in U.S. Is Working

As politicians seek ways to combat the obesity epidemic here in the U.S., taxes and even bans on sodas have been floated in cities across the U.S. When former New York Mayor Michael Bloomberg first tried to tax and then limit the size of sodas in the Big Apple, howls of “the nanny state is here” roared across the country. Beverage industry trade groups screamed bloody murder over the cap on soda sizes that could be sold in NYC, and eventually New York State’s Court of Appeals ruled against the ban, saying the city’s health board lacked any such authority. Now an ex-mayor, Bloomberg has not given up. And a recent study on the effects of a similar policy in Berkeley, CA may give him even more ammunition as a campaign he bankrolled in Philadelphia was approved by its city council earlier this year.

According to the American Journal of Pediatric Health, consumption of sugary drinks such as cola (technically sugar sweetened beverages, or SSBs) in the Bay Area city of 117,000 decreased by 21 percent since the city implemented the tax in March 2015. Meanwhile, the consumption of these sugary drinks increased in nearby Oakland and San Francisco by 4 percent. The study's authors based their conclusions in part on almost 1,000 questionnaires distributed across the city to residents.

This is one of the first studies gauging the effects of a soda tax (as other initiatives have been voted down or repealed), so we are still in the Wild West of sorting out the effectiveness of these measures. Nevertheless, advocates for regulations, bans or taxes on sugary drinks are going to tout this study, giving beverage companies in turn more headaches.

The penny-per-ounce tax was approved by voters by a 3-to-1 margin in November 2014 despite “Big Soda” spending over $2 million to defeat the measure at the ballot box. Supporters of the measure, including Bloomberg, raised $650,000 in their quest to pass the measure.

City officials claim the Berkeley soda tax serves many purposes, including more funding of public health professionals, school nutrition programs and, of course, initiatives to educate about and limit access to sugar-sweetened beverages.

The American Beverage Association, one of several large trade groups representing large soft drink companies, has responded with its usual rhetoric, calling the taxes “unfair” and “regressive.” The association also describes soda taxes as punishing to small businesses and urges politicians to find “comprehensive” solutions to address the complex issues causing obesity. But the issues are not really complex: bottom line, weight gain is caused by ingesting too many calories while not exercising enough to burn those consumed. And sugar, which is finding its way into more foods in more forms, is a huge part of the problem.

Furthermore, the beverage companies are not offering any solutions to the obesity problem here in the U.S., where an estimated two-thirds of adults, and one-third of children, are either overweight or obese. The links between food and beverage companies and obesity is analogous to what has long gone on with other industries. Consumer packaged goods companies have made more and more disposable products, leaving it up to municipalities to deal with the waste these goods generate. Energy companies have provided fuel and electricity, but have pocketed the profits while leaving it up to governments to deal with the effects of pollution. And beverage companies have generated copious amounts of revenue, while local governments have been saddled with paying for health care costs racked up by society’s poorest citizens.

So if the likes of Coca-Cola and PepsiCo want to stave off regulations and taxes targeted at their products, they need to come up with real solutions instead of just shouting “no.” And that window is rapidly closing. Soda consumption, according to Fortune, has fallen to a 30-year low—and the U.S. was home to 86 million less people back in 1985 than its current population. The beverage giants’ current strategy of buying companies such as Honest Tea or Naked Juice can only go so far. Therefore, these companies need to take action now, or suffer more losses as millennials spurn their products – and making the beverage companies look more predatory if their only markets are in poorer neighborhoods and regions where more healthful options are either lacking or too pricey.

Image credit: Oleg Sklyanchuk/Flickr