Bil­lion­aires put pop in ad­vo­cates’ fight

Daily Freeman (Kingston, NY) - - BUSINESS - By Candice Choi AP Food In­dus­try Writer

NEW YORK >> Af­ter years of stamp­ing out soda tax pro­pos­als with well-fi­nanced cam­paigns, Big Soda is sud­denly find­ing it­self up against big­ger ad­ver­saries.

Vot­ers and law­mak­ers in five mu­nic­i­pal­i­ties such as San Fran­cisco and the county that in­cludes Chicago ap­proved spe­cial taxes on sug­ary drinks last week, with ad­vo­cates say­ing the vic­to­ries point to a change in pub­lic at­ti­tudes and the be­gin­nings of a move­ment. What’s also changed, though, is that they’re now backed by bil­lion­aire Michael Bloomberg, who as mayor of New York lost a bruis­ing fight to limit the size of sug­ary drinks.

The soda in­dus­try dis­misses the no­tion that the mea­sures amount to a move­ment, and says the pro­pos­als are be­ing pushed in places more likely to pass them.

“It’s sort of a pesky thing that comes up now and then,” Su­san Neely, pres­i­dent of the Amer­i­can Bev­er­age As­so­ci­a­tion that rep­re­sents Coke, Pepsi and oth­ers, said be­fore the elec­tion.

Seven U.S. cities now have spe­cial, per-ounce taxes on sug­ary drinks. All were ap­proved in the past two years, and got back­ing from Bloomberg Phi­lan­thropies, as well as from Laura and John Arnold, the lat­ter of whom ran a hedge fund.

Oth­ers that passed last week were in Oak­land and Albany, Cal­i­for­nia, and Boulder, Colorado. They fol­low Berke­ley, Cal­i­for­nia, in 2014, and Philadel­phia this sum­mer. Bloomberg Phi­lan­thropies said it will help oth­ers that come for­ward.

The long-term ef­fects of such taxes still aren’t clear, with stud­ies of re­cently en­acted mea­sures still in progress — some of them funded by $10.5 mil­lion Bloomberg ded­i­cated to such re­search.

Even if taxes of 1 or 2 cents per ounce hike prices about 10 per­cent and don’t af­fect how much soda peo­ple drink, the in­dus­try fears the stigma of be­ing sin­gled out and the po­ten­tial for the taxes to be in­creased.

Al­ready, soda con­sump­tion has been de­clin­ing, though other sweet­ened drinks such as sports bev­er­ages and bot­tled teas have grown, and obe­sity rates keep climb­ing.

Still, some the see taxes as a way to curb at least one bad habit, point­ing to cig­a­rette taxes that helped cut smok­ing rates.

“BIG SODA IS TELLING BIG LIES”

Bloomberg says his phil­an­thropic or­ga­ni­za­tion is not or­ches­trat­ing a national push to tax so­das, but pro­vid­ing help when lo­cal or­ga­niz­ers reach out.

“Th­ese are things that we did not start,” he told The As­so­ci­ated Press. “They are bot­tom-up, grass-roots cam­paigns.”

Still, his deep pock­ets are putting ad­vo­cates on a more even foot­ing. In Oak­land and San Fran­cisco, soda tax sup­port­ers had at least $22 mil­lion in cam­paign con­tri­bu­tions this year, largely from Bloomberg and the Arnolds. Tax op­po­nents had $30 mil­lion, re­flect­ing the bev­er­age in­dus­try’s de­ter­mi­na­tion to kill the mea­sure.

Howard Wolf­son, a Bloomberg ad­viser, also pro­vides ex­per­tise to tax pro­po­nents, in­clud­ing feed­back on cam­paign ma­te­ri­als. In San Fran­cisco this fall, TV ads fea­tured the city’s mayor say­ing the tax would help the “small­est San Fran­cis­cans,” fol­lowed by the faces of smil­ing chil­dren.

“Big Soda is telling big lies,” a doc­tor says in one ad.

Even failed mea­sures like New York’s serve a pur­pose, Bloomberg said. “The whole idea was to get a mes­sage out,” he said. “If It just went through, it wouldn’t have been a big deal.”

Wolf­son said other cities will want to repli­cate the suc­cess­ful ef­forts to raise rev­enue, im­prove pub­lic health, or both. Healthy Food Amer­ica, which is funded by the Arnolds, said 20 other cities and states ex­pressed in­ter­est in such taxes in re­cent months. The group gives ad­vice on how to struc­ture mea­sures so they’ll pass, and the type of opposition to ex­pect.

“The in­dus­try is pretty pre­dictable,” said Jim Krieger, who heads Healthy Food Amer­ica.

A hall­mark of the in­dus­try’s play­book, for in­stance, is call­ing the mea­sures “gro­cery taxes” since they’re levied on dis­trib­u­tors, who could pass the costs onto any items.

Less ap­par­ent are the in­dus­try’s be­hind-the-scenes ef­forts.

“LOW RISK, YET WOR­RY­ING”

When France was con­sid­er­ing rais­ing a soda tax last year, Coke ac­ti­vated its “Sparkle” plan to shut down the threat. The strat­egy, named for what Coke calls its “sparkling” so­das, in­volved a “co­or­di­nated plan of ac­tion” with lo­cal food and drink trade groups and lob­by­ing key con­tacts in the agri­cul­ture and econ­omy min­istries to “main­tain opposition.”

“We be­lieve we have all it takes to avoid this yet again,” a Coke ex­ec­u­tive wrote in a hacked email posted by DC Leaks. “It is how­ever a wor­ry­ing con­fir­ma­tion that there is re­lent­less pres­sure on our cat­e­gory.”

The pro­posal failed, but the email, tagged “LOW RISK, YET WOR­RY­ING,” was pre­scient. Another in­ter­nal Coca-Cola doc­u­ment in Europe last year flagged such taxes as very likely to af­fect its busi­ness, and said the com­pany should “FIGHT BACK.”

Other emails il­lus­trate in­flu­ence at high lev­els of government.

When Demo­cratic pres­i­den­tial can­di­date Hil­lary Clin­ton ex­pressed sup­port for Philadel­phia’s bev­er­age tax, an ex­ec­u­tive from Coca-Cola — which gave be­tween $5 mil­lion to $10 mil­lion to the Clin­ton Foun­da­tion — vented to a con­sul­tant for the com­pany, who had worked for Clin­ton at the State De­part­ment.

“Re­ally??? Af­ter all we have done. I hope this has been falsely re­ported,” the ex­ec­u­tive wrote in an email first re­ported by The Daily Caller. De­spite its ef­forts to get Clin­ton to “walk back” her com­ments, Coca-Cola noted that she did not.

JEFF CHIU — THE AS­SO­CI­ATED PRESS

A Septem­ber photo shows soft drink and soda bot­tles are dis­played in a re­frig­er­a­tor at El Ahorro mar­ket in San Fran­cisco.

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