Seattle to become latest US city to tax sugary drinks

Sodas are displayed at a Walmart store in Secaucus, New Jersey.
Sodas are displayed at a Walmart store in Secaucus, New Jersey.PHOTO: REUTERS

SEATTLE (REUTERS) - Seattle's City Council voted on Monday (June 5) to levy a special tax on sodas and other sugary beverages sold to consumers, becoming the latest of several local government bodies across the country to take such action for the sake of public health.

The measure, to be signed by Mayor Ed Murray on Tuesday, was approved on a 7-1 vote despite staunch opposition from the American Beverage Administration, which said the tax would hit poor and working-class families and small businesses hardest.

Enactment will add Washington state's largest city to a growing national movement seeking to curb consumption of soft drinks and other high-caloric beverages that medical experts say are largely to blame for an epidemic of childhood obesity.

Other localities that have adopted similar measures during the past few years include Philadelphia, San Francisco, its Bay-area neighbours of Berkeley, Oakland and Albany, California, Boulder, Colorado, and Cook County, Illinois, which includes Chicago.

A growing body of research has identified sugary drinks as the biggest contributors to added, empty calories in the American diet, and as a major culprit in a range of costly health problems associated with being overweight.

Under the measure, due to go into effect in January, distributors of all bottled and canned sodas, juice drinks, sports and energy drinks, flavoured waters, sweetened teas and ready-to-drink coffee beverages sold in Seattle would pay a tax of US$1.75 cents (S$2.42 cents) per ounce.

At that rate, the cost of a typical 12-ounce can of soda would rise by 21 cents. An equivalent rate would be collected on the syrups used to sweeten fountain drinks sold by restaurants, convenience stores and fast-food outlets in the city.

As higher costs are passed on to consumers, supporters aim to put a dent in sales, as was the case in Berkeley, where according to public health officials retail purchases of sugar-sweetened beverages dropped nearly 10 per cent during the first year of that city's soda tax.

The new Seattle soda levy is projected to generate about US$15 million in revenue a year.

One-hundred-per cent fruit juices and zero-calorie diet drinks are to be exempted, along with dairy-based beverages.

But the language of the measure leaves unclear whether an exemption applies to syrups used in milk-based coffee drinks prepared to order by baristas in coffee shops including those in the Seattle-based Starbucks chain.

City Councilman Tim Burgess, the measure's chief sponsor, said those details would be ironed out through implementing regulations still to be developed by the mayor's office.

Starbucks did not respond to a request for comment.