Nation's First Soda Tax Passes In Berkeley, Fails in San Francisco

11/05/2014 02:33 am ET | Updated Nov 05, 2014

Local ballot measures in California to create the nation’s first taxes on sugary drinks saw both victory and defeat Tuesday when a bill won in Berkeley and lost in neighboring San Francisco, The San Francisco Chronicle reported.

San Francisco’s Proposition E proposed placing a 2-cents-per-ounce tax on sugar-sweetened beverages, defined as drinks containing added sugar and 25 calories or more per 12 ounces. Because the bill required that the money raised by the tax be set aside for specific spending -- health, nutrition, physical education and active recreation programs through the San Francisco Unified School District, Department of Public Health and Recreation and Park Department -- it required a two-thirds vote to pass.

PBS NewsHour calculated that a can of soda, typically 99 cents, would cost San Francisco residents closer to $1.24, and a two-liter soda, priced around $3.99, would cost more than $5.

Proposition E exempts diet sodas, milk and alternative milks such as soy or almond, beverages that contain only natural fruit and vegetable juice, infant formula, meal replacements, supplemental nutrition products and weight reduction beverages, and syrups and powders sold for individuals to create their own sugary beverages.

Berkeley’s Measure D proposed imposing a 1-cent-per-ounce general tax on sugar-sweetened beverages and sweeteners used to flavor drinks. The measure did not dedicate funding to a specific cause and required only a majority of the vote.

Similarly, Berkeley’s proposal makes exemptions for diet drinks, milk products, 100 percent juice, baby formula, alcoholic drinks taken for medical reasons, and sugary drinks and sweeteners distributed to very small retailers.

The ballot measures instigated massive spending by Big Soda. The opposition, which TIME noted was almost entirely funded by the American Beverage Association, raised $9.1 million in San Francisco and $2.4 million in Berkeley, a hefty campaign price tag in a city of just 116,000.

The bills’ supporters have argued that soda and other sugar-sweetened beverages are major contributors to the nation’s obesity epidemic and that taxing them will help address the health crisis. San Francisco’s city economist Ted Egan said the price hike would discourage people from buying sugary drinks and predicted residents would reduce their soda consumption by 31 percent.

Opposition to the bills argued that taxes are already high and that these measures unfairly target the beverage industry. The soda companies, Business Insider noted, have also touted recent decisions to remove all full-calorie sodas from schools as part of their pledge to to cut beverage calories consumed per person by 20 percent by 2025.

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