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The Pennsylvania Supreme Court has denied an application for extraordinary relief filed by several industry groups in an effort to prevent Philadelphia’s 1.5-cent-per-ounce tax on sugar-sweetened beverages (SSBs) from taking effect on January 1, 2017. Williams v. City of Philadelphia, No. 160901452 (Ct. C.P., Philadelphia Cty., order entered November 2, 2016). The one-page order does not provide any reasoning for the decision. The lower court currently presiding over the case has indicated that it will rule on the tax’s legality before the January 1 enforcement date. See The Philadelphia Inquirer, November 2, 2016. Details about the industry lawsuit appear in Issue 617 of this Update.   Issue 621

The World Health Organization (WHO) has published an October 2016 report claiming that “taxing sugary drinks can lower consumption and reduce obesity, type 2 diabetes and tooth decay,” according to a concurrent press release. Titled Fiscal Policies for Diet and Prevention of Noncommunicable Diseases (NCDs), the report collates information gathered during a May 2015 technical meeting of fiscal-policy experts who evidently concluded that “there is reasonable and increasing evidence that appropriately designed taxes on sugar-sweetened beverages would result in proportional reductions in consumption, especially if aimed at raising the retail price by 20% or more.” The report summarizes the effect of fiscal policies—including food and beverage taxes, nutrient-focused taxes and subsidies—on health outcomes in Denmark, Ecuador, Egypt, Finland, France, Hungary, Mauritius, Mexico, Philippines, Thailand and the United States. “Some of the challenges faced in implementation include a lack of appropriate capacity for tax administration, tax set at low levels that…

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…

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 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…

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…

The Canadian Standing Senate Committee on Social Affairs, Science and Technology has issued a “groundbreaking” report on obesity that calls for a tax on sugar- and artificially-sweetened beverages as well as a ban on advertising food and drink to children. Titled Obesity in Canada: A Whole-of-Society Approach for a Healthier Canada, the March 2016 report also recommends, among other things, (i) “a National Campaign to Combat Obesity,” (ii) “a complete revision of Canada’s food guide to better reflect scientific evidence,” (iii) “a review of nutrition food labelling to make it easier to understand,” and (iv) “a plan for making healthy food more affordable.” “Canada’s dated food guide is no longer effective in providing nutritional guidance to Canadians. Fruit juice, for instance, is presented as a healthy item when it is little more than a soft drink without the bubbles,” notes the report, which summarizes expert testimony given before the committee…

The World Health Organization’s (WHO’s) Commission on Ending Childhood Obesity (ECHO) has issued a January 25, 2016, report that recommends, among other things, a tax on sugar-sweetened beverages (SSBs), context-specific dietary guidelines, and “interpretive” front-of-pack labeling. Taking “a life-course approach” that focuses on what it describes as an obesogenic environment, the report urges WHO, member governments and non-state actors to implement specific action items designed to (i) promote intake of healthy foods and reduce intake of unhealthy foods and SSBs among children; (ii) promote physical activity and reduce sedentary behaviors; (iii) provide guidance on preconception and antenatal care to reduce the risk of childhood obesity; (iv) support healthy diet, sleep and physical activity during childhood; (v) promote healthy school environments, health and nutrition literacy; and (vi) provide family-based lifestyle weight management services. In particular, ECHO singles out food and beverage marketing as “a major issue demanding change that will protect…

Whole Foods Market Group and a consumer have reached a settlement agreement in a lawsuit alleging the company defrauded customers by calculating and adding sales tax to purchases before deducting any discounts from coupons. Wong v. Whole Foods Mkt. Grp., No. 15-0848 (N.D. Ill., stipulation filed October 12, 2015). The parties filed a joint stipulation of dismissal to the court but did not disclose the agreement's terms. The lawsuit is one of several alleging claims of consumer fraud, common law fraud and unjust enrichment against various retailers.   Issue 582

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