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The American Beverage Association, other industry groups, retailers and distributors have filed a lawsuit against the city of Philadelphia challenging its tax on sugar-sweetened beverages (SSBs), arguing the statute unlawfully attempts to circumvent Pennsylvania’s taxation supremacy. Williams v. City of Philadelphia, No. 160901452 (Penn. Ct. C.P., Philadelphia Cty., filed September 14, 2016). The plaintiffs assert the statute creates “a roadmap for every local government in the Commonwealth [of Pennsylvania] to evade the Commonwealth’s supreme taxation structure on thousands of products— from over-the-counter pharmaceuticals to cars—merely by imposing a duplicative tax at a different level in the distribution chain than a tax already imposed by the Commonwealth.” Because the beverages subject to the Philadelphia tax are also subject to Pennsylvania tax, the city tax duplicates the state tax, the plaintiffs argue, which amounts to “seizing the taxing authority expressly reserved to the Commonwealth in contravention of the Sterling Act’s prohibition on…

Researchers with the University of Pennsylvania Perelman School of Medicine’s Center for Health Incentives and Behavioral Economics have authored a study claiming that adolescents are less likely to purchase sugary beverages that carry warning labels. Eric VanEpps and Christina Roberto, “The Influence of Sugar-Sweetened Beverage Warnings,” American Journal of Preventive Medicine, September 2016. The study asked 2,202 adolescents ages 12-18 to imagine selecting one of 20 popular 20-ounce beverages from a vending machine. This digital survey included 12 sugar-sweetened beverages (SSBs) that displayed (i) no warning label, (ii) a calorie label, or (iii) one of four labels warning that SSBs contribute to (a) “obesity, diabetes and tooth decay”; (b) “weight gain, diabetes and tooth decay”; (c) “preventable diseases like obesity, diabetes and tooth decay”; or (d) “obesity, Type 2 diabetes and tooth decay.” The results evidently suggested that “77 percent of participants who saw no label said they would select…

Her Majesty’s Treasury (HM Treasury) has released the details of a proposed soft-drink levy announced during March 2016 budget talks as part of the U.K. government’s childhood obesity action plan. Slated to take effect in April 2018, the Soft Drinks Industry Levy (SDIL) would affect the manufacturers of added-sugar soft drinks “with total sugar content of 5 grams or more per 100 millilitres, with a higher rate for drinks with 8 grams or more per 100 millilitres.” The levy exempts beverages with no added sugar—including 100-percent fruit juice—as well as alcohol beverages with alcohol content above 0.5-percent alcohol by volume. The SDIL would also apply to imported soft drinks. HM Treasury has requested comments on the SDIL by October 13, 2016. Among other things, the government seeks evidence and views from respondents about (i) “the types of added-sugar low alcohol products that may be captured by the levy, and the appropriate approach…

The Washington Legal Foundation (WLF) has filed an amicus brief with the Ninth Circuit Court of Appeals arguing the court should enjoin a San Francisco statute requiring advertisements of sugar-sweetened beverages (SSBs) to disclose health warnings related to their consumption. Am. Beverage Assoc. v. City of San Francisco, Nos. 16-16072 and 16-16073 (9th Cir., amicus brief filed August 4, 2016). The brief argues that the government cannot compel speech unless the speech is designed to dispel deception, and San Francisco has failed to show the warning prevents consumer deception. “The First Amendment protects not only the right to speak but also the right not to speak,” WLF Chief Counsel Richard Samp said in an August 4, 2016, press release. “In the absence of evidence that advertisements for sugar-sweetened beverages are deceiving consumers, soft drink manufacturers should not be required to include ominous health warnings in their ads.”   Issue 613

Following a May 2016 refusal to invalidate a San Francisco regulation requiring warning labels on sugar-sweetened beverages (SSBs), a California court has granted an injunction on enforcement pending appeal. Am. Beverage Ass’n v. City of San Francisco, No. 15-3415 (N.D. Cal., order entered June 7, 2016). Details on the May 2016 decision appear in Issue 605 of this Update, while additional information on the lawsuit appears in Issues 573, 586 and 592. The ordinance, set to take effect July 25, 2016, requires billboards and other public advertisements to include a warning that “[d]rinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay.” The American Beverage Association (ABA) challenged the regulation on First Amendment grounds, but the court denied a preliminary injunction, finding the industry group’s claims unlikely to succeed. “[A]n injunction pending appeal may be appropriate, even if the Court believed its analysis in denying preliminary injunctive relief is…

The Philadelphia City Council Committee of the Whole has backed a 1.5 cents per-ounce tax on sugar-added and artificially sweetened soft drinks, a measure that the council anticipates will raise $91 million over the next year. If approved by final vote as expected, the tax will “fund quality pre-K expansion, community schools, reinvestment in parks and recreation centers, and help pad the City’s General Fund,” according to a June 8, 2016, press release. Philadelphia Mayor Jim Kenney (D) initially proposed a 3-cents-per-ounce levy on sugar-sweetened beverages, but the council concluded that such an increase would raise more revenue than needed. Instead, the committee opted to reduce the tax to 1.5 cents per ounce while expanding the scope to include diet soft drinks. The council also advanced a bill “offering tax credits to merchants that opt to sell healthy beverages in their stores.” “A 1.5-cent-per-ounce tax increase on soft drinks will…

A California federal court has denied the American Beverage Association’s (ABA’s) attempt to preliminarily enjoin the enforcement of a law requiring manufacturers of sugar-sweetened beverages (SSBs) to provide a warning about the alleged health risks associated with SSB consumption. Am. Beverage Ass’n v. City of San Francisco, No. 15-3415 (N.D. Cal., order entered May 17, 2016). Further details about the lawsuit appear in Issues 573, 586 and 592 of this Update. The court first assessed the ABA’s argument that the law would burden noncommercial speech in addition to regulating commercial speech, which would trigger the highest level of scrutiny. ABA members’ communications to consumers are not limited to commercial speech, the organization argued, because they also publicize other messages, such as promotion for the Pride Parade and the Chinese New Year’s Festival. The court disagreed, finding the amount of noncommercial speech affected was not substantial. The court then reviewed whether…

New research claims that the daily consumption of artificially sweetened beverages (ASBs) during pregnancy is associated with increased infant body mass index (BMI). Meghan Azad, et al., “Association Between Artificially Sweetened Beverage Consumption During Pregnancy and Infant Body Mass Index,” JAMA Pediatrics, May 2016. Using food-frequency questionnaire data from 3,033 mother-infant dyads enrolled in the Canadian Healthy Infant Longitudinal Development (CHILD) study, researchers reportedly determined that, when compared to children whose mothers did not consume ASBs during pregnancy, those born to the 5.1 percent of mothers who imbibed ASBs daily were twice as likely to be overweight at age 1. “Infant birth weight was not affected, suggesting that maternal ASB consumption influenced postnatal weight gain rather than fetal growth,” explain the study authors. “These associations were independent of material BMI, diabetes, total energy intake, diet quality, and other known obesity risk factors. No comparable associations were identified for SSB [sugar-sweetened…

Healthy Boulder Kids has submitted to the city of Boulder, Colorado, a draft initiative that would impose on distributors a 2-cent per ounce excise tax on beverages that contain at least 5 grams of sweeteners per 12 fluid ounces. Pending review and approval by the city clerk, the public health coalition would then have until June 28, 2016, to collect the requisite number of signatures to get the measure on the November ballot. Revenue from the proposed tax would reportedly be directed to health and nutrition programs aimed especially at low-income residents of the Boulder community. See Boulder Daily Camera, April 21, 2016.   Issue 601

The U.K. Chancellor of the Exchequer George Osborne has announced a new levy on soft drink companies to be assessed “on the volume of sugar-sweetened drinks they produce or import.” In a budget presentation before Parliament, Osborne laid out a two-tiered tax scheme slated to take effect in April 2018, “to give companies plenty of space to change their product mix.” Under the levy, which exempts milk-based drinks and fruit juices, sugar-sweetened beverages will fall into one band with “a total sugar content above 5 grams per 100 milliliters,” or “a second, higher band for the most sugary drinks with more than 8 grams per 100 milliliters.” The U.K. Office for Budget Responsibility apparently anticipates that the levy will raise an estimated £520 million for increased sport funding in primary schools. “Many in the soft drinks industry recognize there’s a problem and have started to reformulate their products… So industry can…

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