Bevarage Industry Spends Millions To Defeat Soda Tax On State/City Level

As a growing number of cities and states are considering plugging budget shortfalls with a tax on soda, the beverage industry is actively lobbying legislatures to defeat the measure, the Wall Street Journal reports. In Philadelphia, the Canada Dry Delaware Valley Bottling Co even offered to donate $10 million “into health and wellness programs in the city through the Pew Charitable Trusts” to keep the city from imposing the tax. “The moves come as officials in at least 20 cities and states have proposed new taxes or the removal of tax exemptions on non-alcoholic beverages so far this year”:

Industry officials argue that taxes would penalize consumers at a time when people are already struggling and lead to lost jobs for bottlers and distributors. “This is all about grabbing money to fill budget deficits and pay for more government,” said Kevin Keane, a spokesman for the American Beverage Association, the main trade organization representing Coca-Cola Co., PepsiCo Inc. and other beverage makers. “There’s really a grassroots disdain for more taxes, especially on grocery items.”

The ABA spent $18.9 million in 2009 on lobbying, compared with about $668,000 in 2008, with most of the money going toward ads against a federal soft-drink tax. The organization spent $5.4 million in the first quarter of 2010, up from $140,000 in the year-earlier period, with most of the money in the latest quarter spent on advertising changes that have been made in beverage selections at schools to reduce calories, the ABA said. The figures don’t include money spent by local coalitions and lobbyists to battle state and local taxes.

Map of state efforts:


So far the lobbying has been a success, as soda tax initiatives have basically failed in Washington, D.C., Baltimore and New York City. The industry has put forth the argument that soda is an essential commodity and that taxing it would disproportionately impact poor families who drink it most. But the tax is only as regressive as the disease itself and the industry’s meme only makes sense if you ignore or discount the fact that obesity disproportionately affects the poor. The “more government” argument is also unsound, since taxing soda could actually reduce government spending on obesity-related treatments and improve health outcomes among lower income Americans.

Lobbyists may have succeeded over the short term, but you can’t get away from the reality that in a period of staggering deficits, taxing a non-essential commodity that only increases health care expenditures makes a lot of sense. That economic necessity for revenue may make all of the lobbying obsolete– at least in the long-term.