The Seattle City Council has approved a tax on distributors of sugar-sweetened beverages (SSBs) proposed by the city’s mayor. SSBs covered by the tax include sports, fruit, energy and soft drinks as well as flavored syrups commonly used in coffee drinks. Baby formula, medications, weight-loss drinks, fruit juice and diet soft drinks are exempt from the tax. See Seattle Times, June 5, 2017. Issue 637
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Voters in Santa Fe, New Mexico, rejected a sugar-sweetened beverage (SSB) tax initiative that would have raised the price of SSBs by 2 cents per ounce. Political action committees, industry groups and advocacy organizations reportedly spent $3.25 million on the vote. Campaign finance reports show that Michael Bloomberg, who began his campaign for SSB taxes and portion caps during his term as mayor of New York City, contributed $1 million to a pro-tax committee. Issue 633
A Massachusetts house bill proposing a one- and two-cent tax per fluid ounce of sugar-sweetened beverages (SSBs) has been withdrawn during a state budget hearing. The tax would have applied to SSBs containing more than five grams of sugar but excluded 100-percent juice, milk substitutes, infant formula and beverages for medicinal use. Although sponsor Kay Khan (D) withdrew the proposal, a spokesperson for her office told Bloomberg that she has filed legislation to pursue the tax. See Bloomberg BNA, April 25, 2017. Issue 632
Four cities and one county have reportedly passed taxes on sugar-sweetened beverages (SSBs), joining Berkeley, California, and Philadelphia, Pennsylvania, in adopting measures purportedly designed to curb sugary-drink consumption. According to media sources, voters in Boulder, Colorado, passed a 2-cent-per-ounce excise tax on SSB distributors, while those in San Francisco, Oakland and Albany, California, passed a 1-cent-per-ounce levy on distributors. In Cook County, Illinois, the board of commissioners also voted in favor of a 1-cent-per-ounce SSB tax. “The tide has turned on this issue, and momentum has swung in our favor,” said Howard Wolfson, senior advisor to former New York City Mayor Michael Bloomberg. “I am confident in the months ahead more municipalities will seek to implement soda taxes to help their citizens, and we will be willing to help them as they do.” See The New York Times, November 9, 2016; Crain’s Chicago Business, November 10, 2016. Issue 622
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…
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
