Former New York City Mayor Michael Bloomberg has donated $18 million to two separate ballot initiatives in Bay Area cities that are seeking soda taxes to discourage consumption of the sugary drinks.
A Bloomberg adviser confirmed to Coins2Day that Bloomberg had poured money into the ballot initiatives in San Francisco and Oakland that seek approval to enact a one-cent-per-liter excise tax on beverages with added sugar. The figures—$9.1 million given to the effort in Oakland and $9.3 million in San Francisco—were first reported by The Los Angeles Times.
If approved, the cities would be the largest to approve taxes on sugary beverages since Philadelphia became the first major American city to do so in June. Bloomberg supported that initiative in Philadelphia by putting $1.6 million during that effort (the soda industry poured in millions more to defeat the effort).
The move by major American cities to approve or at least consider taxes on sodas suggests the industry is becoming an easier target for local governments as they look to raise more funds in a way that won’t upset their constituents. Tobacco makers, alcohol producers, and the hotel and gambling industries have all faced their own fair share of headwinds on the tax front.
Bloomberg has long targeted the soda industry. Back in 2012 when he was still mayor of New York City, his administration sought to cap soft-drink sizes and some retail establishments as a way to curb intake. The move was part of Bloomberg’s efforts to focus on public health. Thought it won approval from the Board of Health, the big-soda ban was later rejected by the state’s highest court in 2014.
When Philadelphia approved its soda tax over the summer, Bloomberg publicly lauded the effort. In a web post, he congratulated Philadelphia mayor Jim Kenney for “standing up to the beverage industry and doing what’s right for the people of their city.” Bloomberg also added he’d publicly back additional efforts by governments to consider similar actions.
“I will continue working to ensure that cities and nations pursuing these anti-obesity strategies get the support they need to level the playing field with the soda industry,” he wrote in June.
The narrative against soda is resulting in some promises to change the formula of those beverages. PepsiCo (PEP) and Coca Cola (KO) both made promises last month to step up efforts to reduce the amount of sugar that’s found in their beverages, responding to pressure from consumers and public policy advocates.
These changes are needed, as soda industry sales have slumped for 11 consecutive years and consumption levels are at their lowest point since 1985. The industry has found itself out of favor as consumers seek beverage alternatives to soda that they deem healthier, notably juices and flavored waters.
Meanwhile, trade organization American Beverage Association has come out against past soda tax initiatives. It called the Philadelphia effort a “regressive tax that unfairly signals out beverages— including low- and no-calorie choices.”
“We oppose taxes that discriminate against our products,” William M. Dermody Jr., vice president of policy at industry organization American Beverage Association told Coins2Day. “We disagree that our products are driving obesity rates. We feel there are other ways to tackle the issue of obesity and we are actively working on those with members of the public health community.”
American Beverage Association says taxes like these hurt consumers and local businesses, affecting lower- and middle-class consumers far more than wealthier shoppers. Dermody added that there is no evidence that these taxes don’t improve public health.