It's been a while since there's been much talk about a soda tax, but last week's election has brought it into light again. More cities approved of placing a tax on soda: San Francisco and Albany in California, and Boulder, CO.
The passing of a soda tax comes shortly after a report by the World Health Organization (WHO) in which it calls on governments to place a tax on sodas and other sugary beverages to help fight obesity.
"If governments tax products like sugary drinks, they can reduce suffering and save lives," says Dr. Douglas Bettcher, director of the WHO's Department for Prevention of Noncommunicable Diseases. "They can also cut healthcare costs and increase revenues to invest in health services."
As you'd expect, the report was not uncontested. The International Council of Beverages Association "strongly disagrees" with the tax, claiming that "it's an unproven idea that has not been shown to improve public health on global experiences."
Those experiences being Berkeley, CA, Mexico, and now Philadelphia, PA.
But researchers have documented a decline in sales in sugary drinks in Mexico, and Berkeley residents reportedly increased their water consumption by 63% while decreasing soda consumption by 21%.
Coca-Cola And Pepsi Respond To Soda Tax
There are conflicting reports about how both Coke and Pepsi are fighting the tax, but one thing is certain: both soda companies have been increasing options for less sugary drinks in recent years due to changes in consumer tastes.
Some of Coca-Cola's healthier options:
- Powerade
- Vitamin Water
- Honest Tea
Some of Pepsi's healthier options:
- Aquafina
- Naked (juices)
- Gatorade
How Much More Would You Pay?
If soda was taxed at a rate of 1.5% per ounce in your city (similar to Philadelphia's tax), here's how much more you would pay:
| 10 oz bottle/can | 15 cents |
| 12 oz | 18 cents |
| 16 oz | 24 cents |
| 20 oz | 30 cents |
| 32 oz | 48 cents |
| 1 liter (33.81 oz.) bottle | 50 cents |
| 2 liter (67.62 oz.) bottle | $1.00 |
What Does A Soda Tax Mean For Vending Companies?
As vending professionals, we know that an increase to the vend price can result in quite an uproar from customers. With the national average of $1.50 for 20 oz. bottled drinks, it would put the price up near $2.00.
Vending companies would surely take a hit, but how much? As more and more cities begin to implement a tax on sodas, time will tell what vendors will have to do.
Frequently Asked Questions About Soda Taxes
What is the soda tax and why are cities implementing it?
The soda tax is a government-imposed tax on sodas and sugary beverages aimed at reducing consumption to help fight obesity. Several cities like San Francisco, Albany, and Boulder have recently approved such taxes following recommendations from the World Health Organization.
What does the World Health Organization say about soda taxes?
The World Health Organization supports soda taxes, stating that taxing sugary drinks can reduce suffering, save lives, cut healthcare costs, and generate revenue to invest in health services.
Are there any opposing views to the soda tax?
Yes, the International Council of Beverages Association strongly disagrees with the tax, claiming it is an unproven idea that has not been shown to improve public health based on global experiences.
What evidence exists that soda taxes reduce sugary drink consumption?
Research from places like Mexico and Berkeley, CA, shows a decline in sugary drink sales. For example, Berkeley residents increased water consumption by 63% and decreased soda consumption by 21% after the tax was implemented.
How have major soda companies responded to the soda tax?
Coca-Cola and Pepsi have been increasing their options for less sugary drinks, offering products like Powerade, Vitamin Water, Honest Tea, Aquafina, Naked juices, and Gatorade to adapt to changing consumer tastes.
How much more would consumers pay if a soda tax is applied?
If a soda tax of 1.5 cents per ounce is applied, similar to Philadelphia's tax, a 20 oz bottle would cost about 30 cents more, raising the price from around $1.50 to nearly $2.00.
What impact could the soda tax have on vending companies?
Vending companies may face challenges as increased prices could upset customers and potentially reduce sales. The full impact will become clearer as more cities implement soda taxes.
