Big Soda Bets That Scaring Ill-Informed Voters Will Stop Three Bay Area Cities From Taxing Sugary Drinks

Voters in three San Francisco Bay area cities—San Francisco, Oakland and Albany—are seeking to follow Berkeley’s lead by passing a one-cent-per-ounce tax on soda and other sugary beverages, prompting the national beverage industry to spend millions to oppose them in a political campaign bubbling over with dubious messaging.
 
“We are facing a serious health crisis. If we do nothing, one-third of all children and nearly half of African-American and Latino children are predicted to develop diabetes in their lifetimes,” said San Francisco supervisor Malia Cohen, making the case for taking proactive steps on the website of her city’s pro-soda tax ballot measure, known as Proposition V.

“Proposition V can provide funding for health education, nutrition and recreation programs as well as access to clean drinking water to improve the health of San Francisco children,” said the first mailer sent out by YesOnSFPropV.com, a coalition that includes medical associations, public health agencies, the local NAACP chapter, clergy, and ex-New York City mayor Michael Bloomberg. “Berkeley passed a similar measure in 2014 and has seen a 21 percent reduction in sugary drink consumption, while water consumption has increased by 63 percent in low-income residences.”

But Big Soda has launched a multi-front attack to defeat the ballot questions by throwing everything it can at voters. It has relabeled the soda tax a “grocery tax” and is claiming it will hurt poor people and pressure corner stores to raise prices. It is attacking sponsors like Cohen as meddling politicians who are focusing on the wrong issue when, as one anti-tax mailer says, "San Franciscans are looking for safer streets, a plan to address homelessness, affordable homes and better transit. But politicians are looking for a tax on groceries." It is conducting tracking polls and launching radio and TV ads.

This fight is a microcosm of what's seen in national political brawls. On one side, a deep-pocked industry has deployed propagandists and fear-mongerers, while on the other side, community groups and their allies want government to advance an obvious public good that a neighboring city pioneered and has so raised nearly $2 million for local health programs with no big impact on businesses or jobs. 

As much as this fight is filled with messaging cliches—especially from Big Soda, which even sued Oakland because it did not like the pro-tax argument in the city voter guide—there are still surprises. As expected, Big Soda has glossy mailers—the most common form of political advertising in California—featuring proud, working-class shopkeepers saying the tax is “the last thing this community needs.” But the American Beverage Association California PAC also found and deployed an unexpected presidential-year weapon.

“U.S. Senator Bernie Sanders got it right when he opposed a similar grocery tax this year in Philadelphia calling it ‘a regressive grocery tax that would disproportionately affect low-income and middle-class Americans,’” one PAC mailer said, citing a Sanders op-ed that appeared in PhillyMag.com before the Pennsylvania primary last spring.

"Mayor Kenney wants to raise $400 million from a tax on juice boxes, soft drinks, teas, flavored coffee and other sweetened drinks,” Sanders said in the op-ed. “His proposal would raise the price of a $1.00 soft drink to $1.24. That will hit many Philadelphians hard, especially the more than 185,000 people in the city who are trying to scrape by on less than $12,000 a year. He twice opposed the same tax idea. He was right then. He’s wrong now.”

Sanders’ stance had more than a little to do with the fact that Hillary Clinton supported the proposed soda tax, which was approved in mid-June by Philadelphia’s city council, making Philadelphia America's second city to beat Big Soda after Berkeley. But beyond appropriating one of Sanders' more specious arguments from last spring's campaign, the soda tax hikes are likely to turn on whether Bay Area voters hear only industry propaganda or pro-tax advocates armed with the results from Berkeley.

The industry mailers just about say a soda tax will cause life as people know it to end. One notes the region is very expensive to live in and poorer people “are being priced out and forced to leave the city they call home [in this case San Francisco]." It continues, “About 225,000 residents, or 28 percent of our city, are at risk for becoming food insecure. Research shows that even a small increase in food prices can mean food insecure families skip meals.”

But paying $1.16 instead of a dollar for a 16-ounce Coke (the tax doesn't apply to diet soda) is hardly the difference between starving or being forced to leave town. That’s not the only dubious messaging from the vote-no side. “Does the Grocery Tax sound familiar,” asks another mailer featuring a sidewalk vendor. “That’s because the politicians put it on the ballot two years ago and it was rejected by voters. Now they are trying again.”

Indeed, another version was on San Francisco's ballot in 2014, when it needed a two-thirds majority to pass. After Big Soda spent about $10 million to defeat it, it only got 55 percent of the vote. This year, the proposal was revised to put all revenues into the city’s general fund, which means it only needs a simple majority, 50 percent plus one, to win. That led opponents to attack the proposed tax as a blank check to politicians. “Enough is enough,” blares another mailer. “The last thing we need is a tax on groceries—a tax that the politicians can spend any way they want.” It warns, “The City could use the proceeds of the tax for any governmental purpose.”

Rants like these are intended to sway low-information voters, which is typical of ballot campaigns. That's because in busy election years most of the attention is at the top of the ticket. But what’s risky about Big Soda's lines of attack, which are also being delivered in the East Bay cities of Oakland and Albany, is that there’s a real record in Berkeley about how that city spent its first two years of soda tax revenues. And that record is positive and compelling.

As Brian Krans reported for OaklandNorth.net, the spending of Oakland’s soda tax revenue would be overseen, as it was in Berkeley, by a committee of “appointees from the medical community, the Oakland Unified School District, and neighborhoods most affected by the negative health effects of regular soda consumption.” He continues, “In June, Berkeley’s Sugar-Sweetened Beverage Product Panel of Experts Commission allocated $637,500 of the more than $2 million generated from the tax so far to the Ecology Center, Healthy Black Families, Berkeley Youth Alternatives, and two YMCA programs focused on reducing obesity and diabetes.”

This good government story didn’t stop there. “Health officials are calling Berkeley’s tax a win because it resulted in a 21 percent drop in consumers buying sugar-sweetened beverages in Berkeley, while cities without the tax saw an increase in consumption, according to a study published last month in the Journal of American Public Health,” Krans wrote. He continued:

“Dr. Jen Falbe, a postdoctoral research fellow at UC Berkeley’s School of Public Health and the lead author on the study, and her team came to that conclusion by interviewing shoppers outside corner stores in lower-income, ethnically diverse neighborhoods in East and North Oakland, San Francisco, and Berkeley before and after Berkeley’s tax went into effect. Overall, Falbe said it made shoppers think twice about buying a sugary beverage, resulting in a 63-percent increase in water consumption.”

Falbe said additional research also found that out of 20 store owners interviewed, almost none were passing along cost increases to soda-buying customers. But whether these findings correcting beverage industry propaganda will be heard in a busy election year when most of the campaign coverage is being dominated by Donald Trump is an open question.  

“The community in Berkeley took on Big Soda and prevailed, against all odds,” that city's soda tax campaign's website said. “The American Beverage Association poured over $2.4 million into our city and expected to crush the effort, like they had so many others. But our community coalition held firm and fought back with the power of relationships: grassroots organizing, volunteers, and thousands of conversations between neighbors, parents, and friends. This victory belongs to all of us.”

But now that fight is in Oakland, Albany and San Francisco. So far, pro-tax proponents have raised hundreds of thousands of dollars, including six-figure donations from Bloomberg. But as of mid-September, Big Soda has reserved at least $9.5 million in radio and TV ads on Bay Area stations, and every day seems to produce a new anti-tax mailer or telephone polling call asking one's stance.

The Bay Area soda tax battle is yet another political fight where a lone corporate interest is willing to spend millions in hopes that dominating the messaging will result in voters acting out of fear to preserve their profits. Meanwhile, on the pro-tax side, a coalition of public health activists and community leaders are pointing to a nearby record of success that debunks the rampant fear-mongering.

"Don't believe the lies from Big Soda," says the latest pro-tax mailer that arrived on Wednesday. "We can protect local kids and fight back against diabetes."

Come Election Day, we will see what voters in three Bay Area cities swallow.