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Sugar showdown: Vote on San Francisco soda tax draws near

October 11, 2014 at 11:00 AM EDT
As a vote on whether to raise the tax on sodas, teas, energy drinks and any others that contain added sugar sold in San Francisco draws near, advocates for the beverage industry and public health arena weigh in on how this tax -- similar to others proposed in cities across the country -- would affect consumers. NewsHour Weekend's William Brangham reports.

JADE MAR: I don’t like Gatorade — its 2 dollars.

WILLIAM BRANGHAM: It’s Wednesday afternoon — school’s out — and 13 year-old Jade Mar is doing what thousands of kids in San Francisco do after school: debating what drink to get at the corner store.

JADE MAR: Chocolate milk? Or Sprite… Coke.

WILLIAM BRANGHAM: The attempt to try and steer the choices of what kids like Jade drink — really what all Americans drink — has become a big political fight in San Francisco in recent months. That fight broke out in large part because of Jade’s own father — San Francisco supervisor Eric Mar.

ERIC MAR: If you just think about this, my daughter’s generation — 1/3rd of them will develop Type 2 diabetes in their lifetime.


ERIC MAR: And if you’re black or Latino, it’s one half.

WILLIAM BRANGHAM: Despite its reputation as a mecca for healthy food and healthier living, San Francisco still suffers from high rates of obesity and diabetes. Nearly half of San Franciscans are overweight or obese. Officials say not only is this bad for those individuals, but they say those ailments costs taxpayers as well — at least an estimated 750 million dollars a year in San Francisco alone.

Supervisor Mar argues that sugary drinks are one of the prime culprits in this health crisis, and so earlier this year, he introduced an initiative that, if passed by voters in November, would raise taxes on sugary drinks across the city.

Here’s how it would work: the city would impose a two cents per ounce tax on any beverages that contain added sugar or non-diet sweeteners. So any soda, tea, energy drink — whatever has added sugar in it — gets the tax. The tax is imposed on the distributors, who would then pass it onto the retailers. Proponents hope the store owners would then raise the price of those sugary drinks in their stores.

For example, a can of soda that now sells for, say, $.99 would now cost about $1.24 . A two liter soda — currently at about $3.99 — would be more than $5.00. The whole idea behind the tax is when those sugary drinks are pricier than their counterparts, consumers will choose something else — something healthier — something that isn’t hit with the tax.

ERIC MAR: I think when a consumer sees that a product will cost a little bit more, they will either reduce their consumption of that harmful product, but also they might choose a healthier option — non-fat milk drinks, even water as the healthiest and most readily available and accessible drink as well.

WILLIAM BRANGHAM: The city estimates this tax could both reduce consumption of sugary drinks by up to 31%, and could generate upwards of $50 million — money the city plans to steer into programs to cut hunger, increase access to healthier foods, and pay for more p.e. teachers in schools.

It’s not the first time we’ve seen this kind of attempt. Even though Mexico implemented a soda tax earlier this year (and saw consumption go down) numerous other communities in the U.S. have tried similar proposals, and most failed to become law.

The best known example was New York city, where former mayor Michael Bloomberg tried to ban soda servings bigger than 16 ounces — an idea that made the rounds on late night TV.

STEPHEN COLBERT: The Colbert Report: No more giant sodas? Come on! This is America — the land of plenty! We haven’t even achieved Type 3 diabetes yet. We’re so close!

WILLIAM BRANGHAM: Bloomberg’s initiative — along with many others — was defeated. But that didn’t deter officials in San Francisco, where city supervisors debated the proposal.

MALIA COHEN: Bullets are not the only things that are killing African American males, we also have sugary beverages that are also killing people.

KATY TAN: What is gonna stop someone from going across the way to Daly City, to Costco, stocking up on sugary beverages in another area not in San Francisco.

WILLIAM BRANGHAM: The initiative passed and was placed on the November ballot under the name “Proposition E” — but then the beverage industry — much like it did in New York and many other communities — launched a big campaign to defeat the proposal.

ADVERTISEMENT: “Two cents per ounce can really add up fast!”

KAREN HANRETTY: The beverage industry I think has tried to do a lot over the years — it’s never going to be enough for some people.

WILLIAM BRANGHAM: Karen Hanretty is helping lead the industry’s campaign. She’s the policy director for “Californians for Food and Beverage Choice,” an offshoot of the American Beverage Association. Their effort — with posters and billboards and TV ads in three languages — all argue that the proposed tax will hurt businesses and hurt consumers.

Hanretty argues that the soft-drinks industry has already done a lot for public health: introducing a variety of healthier drinks, putting calorie labels on the fronts of bottles and cans, and last week’s big industry-wide pledge to reduce the calories in their drinks by 20 percent over the next decade.

KAREN HANRETTY: We think that consumers should be able to make the choice for themselves without taxes or regulation trying to influence their behavior, or trying to penalize their behavior.

WILLIAM BRANGHAM: Why a tax? Why not just educate people, show them what a healthy diet and a healthy lifestyle looks like? Isn’t that a better approach than taxing a particular product?

LAURA SCHMIDT: We’ve been doing that for a long time.

WILLIAM BRANGHAM: Laura Schmidt, from U.C. San Francisco, has been researching public health policy for over twenty years. Though she was consulted by the supervisors who drafted the beverage tax, she says she’s not taking a position for or against.

LAURA SCHMIDT: A lot of obesity prevention for many years has been trying to educate kids about healthy diet and nutrition.

WILLIAM BRANGHAM: And that does not work?

LAURA SCHMIDT: And the evidence shows that over time, you can kinda change kids’ attitudes. You can increase their knowledge. But what you don’t get are lasting changes in behavior.

WILLIAM BRANGHAM: Schmidt says, one of the best ways to change behavior is education, but education combined with raising the prices of unhealthy products.

LAURA SCHMIDT: There’s very strong evidence that taxation is one of the most effective public health interventions for reducing the consumption of harmful products.

WILLIAM BRANGHAM: You raise the price of a product, people use less of that product.

LAURA SCHMIDT: Yes. Anything you can do to make that price a little higher is gonna discourage the consumer from consuming it in large amounts.

WILLIAM BRANGHAM: Officials in San Francisco argue that your industry’s products are part of the reason why we have an obesity and diabetes problem in this country, and they argue that taxing those particular products is a way of steering people away from those products and maybe helping the health of everyone. Isn’t that the role that government should be playing?

KAREN HANRETTY: Well, it’s a dicey road to go down. Because we definitely have an obesity problem. We have a weight problem in America. There’s no denying that. But you can’t single out I think any one food or beverage and say, ‘Ah-ha, that is the culprit.’ Because, again, we have seen a significant decline in consumption of soda, for instance, and while those numbers were declining, obesity rates were going up. And diabetes, type II diabetes, was also going up.

WILLIAM BRANGHAM: It’s true that soda consumption has declined somewhat in recent years, but some of our most popular drinks these days deliver the entire recommended daily amount of sugar in a single container. Some have far more sugar in them. In fact, sweetened drinks are still the largest single source of sugar in our diets today. But the debate in San Francisco has gone beyond public health.

Critics of the so-called “soda tax” have raised several other concerns: one being that this tax could be what’s called a “regressive” tax — one that hurts poorer people more because they tend to buy more sugary drinks. Supporters counter that those communities also disproportionately suffer from chronic health conditions that they say this tax would help address.

ERIC MAR: I look at it this way — I think diabetes and obesity are regressive. They impact most heavily the lowest income and especially communities of color. That is incredible regressive. Soda tax will help to address that problem of obesity and diabetes in low-income communities.

WILLIAM BRANGHAM: The other concern raised by critics is that the tax will hurt small businesses. The beverage industry’s ad campaign features owners of small mom and pop businesses all complaining that the tax will hurt their bottom line. Mosa Sadoon — who owns a small grocery store with his brother in San Francisco — says raising the cost of sugary drinks is going to drive customers away.

MOSA SADOON: The amount of tax? I mean, $0.02 per ounce is absurd. So I’m gonna be, what, selling a two-liter Coke for $4.99?


MOSA SADOON: That’s steep. You come from New York, you’re gonna think I’m ripping you off or I’m crazy, you know, either one of ’em.

WILLIAM BRANGHAM: Of course, it’s unknown if the tax is even going to pass in the first place. Despite the failure of similar efforts in many other communities, supporters here argue that of all places, Northern California might be the spot where they finally find success at the ballot box.