Government. Industry. You.
Recent years have seen several cities across the country adopting a soda tax in response to the looming obesity crisis. It’s too early to tell how well they’re working, but it’s clear that a fervent national debate has emerged around the subject with dogmatic supporters and outspoken critics. Seattle is the latest focal point of the conversation, and this time they’ve even managed to get one of their most famous homegrown brands involved -- Starbucks.
As of January 1, 2018, a Seattle ordinance enacting a 1.75 cent tax per ounce on sweetened beverages is officially in effect. This legislation covers a large range of options including soda, energy drinks, sweetened iced tea and coffees, and juice with added caloric sweeteners.
Seattle joins several other American cities that have proposed or enacted soda taxes in an attempt to thwart the impending obesity crisis. Type 2 diabetes, hypertension, and cardiovascular disease are all on the rise, and each one of these ailments have been linked to a high consumption of sugary drinks. Ideally, Ordinance 125234 would fix this with a two-pronged approach -- by discouraging the purchase of sweetened beverages and by using the revenue to provide fresh food options to low-income families.
The Fresh Bucks program, a Seattle approach that matches every food stamp dollar spent at a farmers market to purchase local produce, is projected to receive $2.4 million from the first year of the soda tax. However, this only represents 16% of the expected $14.8 million in revenue, the rest of which is spread out across administrative, educational, and various social initiatives.
Furthermore, critics also argue that the tax is regressive -- meaning that it affects lower-income families to a larger extent than those with more discretionary funds. It also has dramatic effects on small businesses, who are forced to raise their prices just to stay afloat. A 20-ounce soda will now cost around $2.14 instead of $1.79, and a 12-pack will rise in price by a little over $2.50.
As imagined, industry giants like the American Beverage Association (ABA) are less than thrilled about the implementation of a soda tax. An ABA-backed coalition distributed over 100,000 fliers in the Seattle area to warn consumers of high prices, and a new committee entitled “Yes! To Affordable Groceries” recently registered with the Washington State Public Disclosure Commission. However, these ABA-sponsored initiatives do not attempt to repeal the soda tax -- rather, they aim to halt a domino effect of “taxing food and beverages and making groceries unaffordable.”
But these proactive acts don’t help the Seattle residents and businesses who are confused and angered over the current law. Few cities can outdo Seattle when it comes to coffee, yet the purview of this legislation in regards to the city’s favorite beverage is murky. Ordinance 125234 specifically exempts “any beverage in which natural milk is the first ingredient,” which would include lattes, cappuccinos, and several other common coffeehouse orders. This means that a Grande Cinnamon Dolce Latte from Starbucks, with a whopping 41 grams of sugar, would escape the soda tax unscathed. In contrast, a Grande Light Caramel Frappuccino only has 29 grams of sugar, but would be subject to taxation because the first ingredient listed is “ice” instead of “milk.”
A spokesperson from Starbucks expressed concern regarding “the harmful economic impact” of this tax, and the company spent nearly $7,500 in 2017 lobbying city officials against the legislation.
The Seattle-based coffee giant isn’t the only business frustrated with Ordinance 125234 -- Costco, known for its bulk sizes, has been explicitly displaying the cost difference for its customers in its affected stores. They’ve even been pointing their customers towards stores that are just outside of the Seattle limit, where they can purchase items like the Gatorade Frost Variety Pack for nearly $10 cheaper.
While Starbucks’ and Costco’s brazen candor earns a good laugh, they reflect a larger point. This new tax is attempting to curb Seattle residents’ sugar consumption at the expense of the beverage industry -- and not any other confectionary or discretionary food retailers. The next few years may seen an expansion of the tax to other goods, especially if the obesity crisis continues to grow unchecked. In the words of Jennifer Cue, CEO of Jones Soda, “[the soda tax] is really a revenue grab. If it’s a sugar issue, it should be on all sugar products.”
Disclaimer: I am not a licensed nutritionist nor a registered dietician. The opinions expressed in this article are my own, and each individual is ultimately responsible for his/her dietary and nutrition practices. Please consult a physician before starting a new dietary program.