The Debate Over Sugar Tax Sparks Again, Following Cook County’s Repeal

The Debate Over Sugar Tax Sparks Again, Following Cook County’s Repeal

Last week, the penny-per-ounce soda tax on consumers, implemented by Cook County early August of this year, was repealed after much push-back from the public and heavy lobbying from Chicago’s business community.

Foodable first reported on the controversial tax last year, when five U.S. local governments (San Francisco, Oakland, Albany, Boulder, Cook County) passed tax measures on sugary drinks following the example of cities like Berkeley, Ca. and Philadelphia, Pa.

Cook County was the largest local government to implement the soda tax and the only entity to tax consumers directly rather than the distributors of the sugary beverages like in the rest of the cities.

After just two months of being in effect, the sugar tax will end by Nov. 30, the end of the Cook County budget fiscal year, thanks to a 15-2 vote by the county’s Board of Commissioners, according to The Chicago Sun-Times.

Critics of the tax repeal point to aggressive ads by the beverage industry criticizing commissioners for plans to allocate the revenue from the soda tax to help cover budget deficits as one of the reasons why big soda was able to convince the public the measure was not a good idea in the first place.

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The War on the Soda Industry Begins, Taxes on Sugary Beverages Get Passed in Five Cities

The War on the Soda Industry Begins, Taxes on Sugary Beverages Get Passed in Five Cities

By Kerri Adams, Editor-at-Large

Legislation passed last Tuesday will forever impact the restaurant and beverage industry. 

The beverage sector, specifically will be taking a hit as soda tax legislation passed in five cities. 

With the healthy food movement sweeping the nation, consumers are more educated about nutrition. With that in mind, many former beloved sodas now have a negative connotation. Many of these beverages contain ingredients that healthy consumers try to steer clear of. 

California is again paving the way with this legislation. The cities of Albany, San Francisco, and Oakland have voted in favor of a penny-per-ounce tax on sugary sodas. These measures passed in both Oakland and San Francisco with 62% support and Albany saw a whopping 71% vote “yes” in favor of the tax. 

The city of Boulder, California passed a similar tax. There will be a 2-cent-per-ounce excise tax on these beverages. 55% of voters were in support of the Boulder measure. 

Chicago’s Cook Country will be the largest local government to adopt the soda tax measure with a 1-cent-per-ounce tax on regular soda and soda filled with zero-calorie sweeteners.  

So why the tax?

Those in favor of these tax measures argue that these beverages contribute to the obesity and diabetes epidemic and that the funds collected will be directed to help fund health programs. These measures are expected to raise millions to help combat these health issues. But, is soda primarily to blame for these health issues? 

However, consumers may or may not be dishing out more money for a soda pop. The tax will be paid by the distributors of the beverages in Albany, Oakland, San Francisco and Boulder. This type of tax differs from the “sin taxes” on tobacco and alcohol because instead of the consumer paying the tax, the distributor can choose to eat the extra costs or pass it along to the consumer.

Chicago's County Cook, on the other hand, will be taxing the consumer directly. 

Medical beverages, meal supplements, baby formulas, milk products, alcohol and juices without added sweeteners are exempt from the tax.

So what else does this mean for the beverage industry?

The soda industry has already seen a slump in sales, but that is also because there are so many more healthier options out there. Many of which are being sold by major soda companies. 

"Companies are offering more options than ever before, including more low and no-calorie options as well," said Lauren Kane, senior director of communications at the American Beverage Association. "Nearly half of the beverages they sell do not contain calories. They are innovating and offering more choices so people can make the best choice for them that fits their lifestyle. Our industry is built on innovation, so companies are always reformulating and innovating to meet the changing taste of consumers."

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