Soda Tax Preemption

Photo of Kristine Madsen

July 12, 2018

By Kristine Madsen, MD MPH

Dr. Kristine Madsen, a pediatrician, is the Faculty Director of the Berkeley Food Institute and an Associate Professor at UC Berkeley’s School of Public Health. Her team published the first study on the impact of Berkeley’s soda tax. 

The soda industry just managed an end-run around the democratic process in California, making it impossible to implement any new, local ‘soda taxes’ (sugar-sweetened beverage taxes) for the next 12 years. This is known as preemption and should alarm anyone interested in public health or political transparency.

The recent advent of soda taxes is a direct response to an American diet that is the unhealthiest it has ever been. The beverage industry spends billions of dollars annually on marketing and advertising to influence consumer behavior. This investment is highly effective; there are huge profits in the sale of sugar-sweetened beverages. Unfortunately, these profits come at the expense of public health. Today, more than 1 in 3 American adults are obese. Obesity is strongly linked to heart disease, the leading cause of death in the U.S. (and globally), and to diabetes, which is on the rise. Sugar-sweetened beverages, associated with the development of heart disease and diabetes, are the single dietary item proven to cause obesity. Unfortunately, when an industry is reaping huge profits on a product, they may fight evidence suggesting the product causes harm (just look at tobacco companies) or any efforts that reduce consumption of the product.

Soda taxes are reducing consumption of sugar-sweetened beverages in Mexico, France, Berkeley and Philadelphia. Results from Mexico suggest that the declines will persist over time, and our data from Berkeley show a 45% decline in consumption in low-income neighborhoods over the first 3 years of a soda tax. Population models suggest that these taxes will result in major savings in health care costs – approximately $2 billion dollars annually with a national tax – and significant declines in diabetes and heart disease, not to mention tax revenues that can support public health initiatives. Yet more compelling evidence as to the effectiveness of taxes: the beverage industry is spending millions to quash them.

Photo of students spreading knowledge about soda.
Youth outreach at the Berkeley Farmers’ Markets. Photo by Ecology Center.

The beverage industry claims that soda taxes will lead to job losses. Evidence from Mexico showed no decline in jobs over the two years after their soda tax was implemented.  Predictions out of the University of Chicago suggest the same for soda taxes in the U.S. As was found with tobacco, reduced demand for soda will result in increased spending in other sectors. The beverage industry has also raised the alarm that soda taxes represent government overreach. Given that they hijacked state legislation to achieve their aims, this claim now sounds highly disingenuous.

Obviously, the beverage industry doesn’t want soda taxes – anything that decreases sales is a threat to them. However, we need to find ways to hold corporations accountable for the harms their products cause. While many corporations are embracing “corporate social responsibility,” a movement aimed at creating more ethical business practices, last week’s pre-emption bill in California shows the beverage industry isn’t among them. Until they reduce the harms their products cause society, taxes are by far the most effective means the public has to defend its health.

Soda taxes are only one approach to raising people’s awareness of health risks, but if the beverage industry can stymy this effective approach, surely, they’ll work to halt any other tactic that threatens their profits, no matter how beneficial to the public.  These profit-only models of growth are no longer viable, especially when they have vast health consequences and costs.

California must move forward with strategies that improve population health.  We can work to implement a statewide soda tax (as California’s Medical and Dental Associations are now doing) or to repeal the pre-emption bill so that communities can look after the interests of their constituents. Other states need to be aware of the dangers of pre-emption. New federal legislation proposing a “cap and trade” system on added sugars in foods could be proposed. We can make socially responsible choices and investments (or divestments) at an individual and institutional level, and we can, as have other countries (and as we do with tobacco), eliminate marketing of unhealthy food to children. We’ll need multiple approaches to create a healthier population, and we need to begin and maintain a conversation about shifting the corporate framework from one of unlimited growth to one of healthy equilibrium.



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