Big Soda’s Grip Fizzles As Berkeley Passes a Soda Tax

Yes on D Berkeley

Big Soda’s obscenely expensive winning streak has fizzled out.

Berkeley, California has become the first city in the nation to pass a sugary drink tax specifically designed to reduce consumption. The penny per ounce soda tax (Proposition D) passed on Tuesday with a whopping 75.12 percent of the vote, in spite of the soda industry’s fevered campaign to defeat the measure.

The tax will be implemented on January 1, 2015.

Through its trade organization, the American Beverage Association, industry spent upwards of $2.4 million to defeat the tax, about $30 per registered voter. As industry sensed a loss in the making, it saturated Berkeley with No on D messaging including posters, billboards, mailers, full page ads, flyers, teams of canvassers, paid protesters, TV commercials and BART stations covered with anti-soda tax messages. It appears that their frenzied overkill backfired, making the community distrust them even more.

The pro-tax Berkeley vs. Big Soda campaign raised at least $550,000, including contributions from former New York City Mayor Michael Bloomberg. Bloomberg also supported Proposition D through an in-kind donation of pro-soda tax TV commercials, one of which aired during the World Series, which, as luck would have it, featured the San Francisco Giants

Across the bay, there was more good news as San Franciscans showed solid majority support for their two-cents per ounce sugary drink tax, though the measure ultimately failed. Proposition E secured 54.5 percent of the vote but since the funds would have been earmarked for nutrition and recreation programs, the measure required a 2/3 vote to pass. Nevertheless, large, progressive cities will surely be emboldened to introduce their own soda tax thanks to the impressive San Francisco showing.

The beverage industry also spent big in San Francisco, pumping in at least $9.1 million for their No on E campaign. In a statement, Nancy Brown, CEO of the American Heart Association, noted that voters chose health in spite of the onslaught of negative advertising from the beverage industry: “Policymakers across the country should take note that the majority of voters in (San Francisco and Berkeley) supported a significant increase in the price of sugary drinks in order to address the dual epidemics of obesity and diabetes we face as a nation.”

The Yes on E campaign also posted a statement, highlighting their excitement about a “national movement that was kicked off tonight,” as well as the drastic financial imbalance between the Yes on E and No on E campaigns: “We were able to accomplish an incredible amount over 10 months with 1/30th of the funds the No side had.”

Big Soda’s combined expenditures in Berkeley and San Francisco will likely surpass the $13 million it spent in New York State in 2010, to defeat the nation’s first penny per ounce soda tax proposal. It has been estimated that the beverage industry has spent over $100 million in the past five years to defeat soda taxes around the nation.

So where does the soda tax movement go from here? Data will be collected in Berkeley, over the next year, to measure the effectiveness of the tax. This data will be added to the knowledge being gleaned from the first year of Mexico’s peso per liter sugary drink tax. In preliminary results, the tax has resulted in a 10 percent decline in purchases of sugary drinks while untaxed beverages show a 7 percent increase. Particularly notable within this category is the 13 percent increase in plain water purchases.

Inspired by the win in Berkeley and the majority support for the San Francisco soda tax, Michael Jacobson, executive director of Center for Science in the Public Interest predicts that other cities and states will be readying similar soda tax campaigns. In a statement, Jacobson noted, “Coca-Cola, PepsiCo, and the American Beverage Association can no longer count on spending their way to victory.”

And BeyondChron’s Dana Woldow reports that there are already additional locales interested in introducing soda taxes, according to Xavier Morales, executive director of the Latino Coalition for a Healthy California. Morales reveals, “entities across the state (of California) have just been waiting to hear what happens in Berkeley and SF to advance their own local plans for a tax.”

The beverage industry, not surprisingly, had a different take on their loss in Berkeley, according to Politico. American Beverage Association spokesman Chris Gindlesperger professed little concern because “Berkeley doesn’t look like mainstream America.” But clearly anxiety plagues him as he issued a stern warning to legislators considering a soda tax proposal: “If politicians want to stake their political reputation on this, they do so at their own risk.”

In the face of the beverage industry’s outrageous expenditures to kill both Berkeley’s and San Francisco’s soda tax, one thing is now crystal clear. New soda tax campaigns must be funded from the earliest stages for the best chance of success. Fortunately, as Helena Bottemiller Evich reports in PoliticoPro, billionaire Michael Bloomberg, in the wake of Berkeley’s success, is ready to fund other municipalities that want to put a soda tax on the ballot:

Bloomberg will look at two key factors when deciding whether to back soda tax campaigns: The strength of the grass-roots campaign and whether the initiative can succeed.

“When we come in, we need to do it as a junior partner,” said (Howard) Wolfson (a senior adviser to Bloomberg). “It can’t be top-down, it needs to be bottom-up. It needs to have some good chance of success. There needs to be a viability factor in it.”

“You don’t want to waste it on an effort that may not be successful.”