Soda Taxes

Proposed Anti-Soda Bills in California Would Ban Big Gulps, Mandate Warning Labels on Vending Machines

State legislators are preparing to take the nanny state to the next level


Andrii Shevchuk/

California legislators want to crack down hard on the soda industry with a series of new bills that would prohibit everything from Big Gulps, to stocking sodas near the checkout aisle.

"We have an incredible public health crisis. Obesity and diabetes are at alarming rates, driven by the deception of Big Soda. And certainly what happened last year didn't help," Assemblyman David Chiu (D–San Francisco) told the San Francisco Chronicle.

Last year, the state Legislature banned local governments from imposing new taxes on soft drinks or other grocery items for 12 years in exchange for the beverage industry dropping a proposed ballot initiative that would have required two-thirds support from voters or city councils to pass any new taxes.

Proponents of soda taxes fumed at the tactic, saying the beverage industry's threat to use direct democracy to limit tax increases amounted to holding legislators "hostage," in the words of Sen. Scott Wiener (D–San Francisco), "aiming a nuclear weapon at government in California."

These same sweetened beverage critics are apparently still salty in 2019, giving rise to the sweeping, almost punitive nature of the bills in this new soda package.

One bill, authored by Sen. Buffy Wicks (D–Berkeley) would ban the display of any soft drinks within six feet of a checkout area, save for coffee, tea, 100 percent natural fruit or vegetable juice, or water. Stores that stock unpermitted drinks within reach of the register would be subject to per-day fines of between $1,000 to $5,000, depending on the number of violations.

Another bill, this one from Sen. Bill Monning (D—Central Coast), would mandate prominent black and yellow warning labels on individual soda bottles and cans, cases, and even vending machines warning that "drinking beverages with added sugar(s) may contribute to obesity, type 2 diabetes, and tooth decay."

Assemblyman Rob Bonta (D—Alameda) has similarly introduced a bill that would, according to the Chronicle, "bar soda companies from offering promotional deals to stores to lower the price of sugary drinks for customers."

Chui is sponsoring a bill that would ban Big Gulps or any other "unsealed beverage container" capable of holding more than 16 ounces. Going above that limit could net stores fines of $200 to $1,000.

On top of all this is a proposal by these legislators to impose a new state soda tax, the revenue from which will fund programs targeting obesity, diabetes, and other supposedly soda-induced maladies.

Soda sellers are obviously not happy, and are panning the new measures as heaping huge new costs on low-income consumers and small businesses.

"These kinds of regressive taxes are not supported by the people of California because they place an unfair burden on working families and neighborhood businesses already struggling with the state's high cost of living," said the American Beverage Association (ABA) in statement. The ABA also pointed to polling showing 71 percent support for last year's moratorium on new grocery taxes.

Soda taxes got their start in California, when the city of Berkeley imposed a 1-cent-per-ounce tax on "sugar-sweetened beverages" in 2015. The policy spread to places like Seattle and Philadelphia soon after. The record of these policies is mixed, as each has failed in its own special way.

One study of Berkeley's soda tax, which is held up as a model for the policy, saw a decline in the sale of taxed sugary beverages and increased sales of untaxed drinks like bottled water. That same study however failed to find a link between the tax and declines in individuals' actual consumption of soda.

In Seattle, where a 1.75 cent-per-ounce tax* was implemented in January 2018, revenue has exceeded expectations, bringing in more than $17 million in its first nine months. A study performed for the city found that nearly 100 percent of the cost of the tax was being paid by consumers. That suggests folks are consuming the same amount of soda, but just paying more for the privilege.

Philadelphia's soda tax, meanwhile, has sprouted any number of social ills, including labor strife and the rise of a black market in soda. Soda sales within Philadelphia have cratered, while spiking in stores just outside city limits, according to one study.

As with all sin taxes, there's a contradiction at the heart of California's proposed soda tax: the policy is supposed to both dissuade soda purchases and raise significant revenue from taxing them. To succeed on one metric is to fail on the other.

Legislators are adding to the mix with more onerous, unproven policies that micromanage businesses that sell soda while treating people who drink it like children in need of state-mandated portion controls and bright warning labels.

The details of these new soda policies are still being hashed out, and no committee hearings have been held. Whether they succeed or not, California's reputation as a nanny state will remain intact.

CORRECTION: The original version of this article said Seattle's soda tax was $1.75 per ounce.