The City Council has been gathering input on the mayor’s controversial soda-pop-tax proposal. When you hear from the business and health communities, you start to see how messy the situation is.
Sugar may be bad for your health, but it is very good for business. The city of Seattle is trying to craft a tax on sweetened drinks that would nudge residents toward healthier drinking habits while allowing businesses to continue to sell sugary drinks.
Wednesday, the City Council finance committee heard from business owners about that, and then from people from cities that already have sweetened-drink taxes, as well as from two health-care professionals.
They brought perspectives informed by their particular relationship to the subject and they all brought data — about costs and profit margins, or about tax revenue and behavior changes, or about obesity, diabetes and other diseases.
People crave sweetness, and perhaps the most successful strategy for exploiting that desire has been the creation and marketing of sugar water — cheap to make, profitable to sell.
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You can get a Coke, Pepsi or other soda just about anywhere, and until fairly recently, most people took them for granted, the way cigarettes used to be.
Ryan Hopkins, co-owner of Burger Boss in West Seattle, talked about how the tax would affect his bottom line. He said, “You are asking us to lower our margins way down.”
“That’s our intent,” Councilmember Mike O’Brien replied. “We want there to be a noticeable increase. Not to put you out of business. Not to say nobody in the city can drink sugared beverages, because that’s not going to happen. But we do want to start to tip the scale so that people are choosing healthier alternatives.”
I liked that response. There’s not much good about the drinks other than their contribution to the bottom line. That feels worse to me when it’s the big, corporate purveyors of sugar water. I have some empathy for small businesses, but that has limits. How is it good for a person’s livelihood to depend on selling another person an overpriced product that delivers almost nothing beneficial, but could add to a risky diet?
Taylor Hoang spoke on behalf of her business, Pho Cyclo, and as the executive director of the Ethnic Business Coalition, a group of small businesses, many owned by recent immigrants. She uses soda to get customers to spend more. “Buy a sandwich and get a soda and eggroll for a little more.” Customers eat more than they intended and spend more, too. The up-sell might not work if the price was higher.
But we all like small businesses. Hoang said small businesses are already dealing with lots of impediments. She said she sold one of her five restaurants because of the new labor laws in 2015 (Seattle’s minimum-wage increase took effect that year) and other cost increases. And a restaurant her mother owns is struggling with higher rent.
I suppose it’s only on the surface that they seem to be doing well. Nothing about the tax proposal is without complicating factors and competing interests.
The Seattle tax was first proposed by Mayor Ed Murray as a 2-cent-per-ounce levy on distributors of sugary drinks that would raise money for programs that primarily help children in low-income families.
That proposal has since been amended to include diet drinks, which would raise the desired amount of money with a tax of 1.75 cents per ounce. Diet drinks were added because of concerns that it’s mostly low-income residents who buy the sugary drinks, so higher-income residents were getting a tax pass.
But low-income families are most affected by the diseases to which sugary drinks contribute. And lowering the tax reduces the disincentive to buy. One of the speakers said low-income families are particularly price sensitive, so their consumption of the drinks drops as prices rise.
On the other hand, diet drinks aren’t great for you, either.
But how much can a business charge for water? Never mind: A number of big-soda companies got into bottled water in a big way to cover their bottom lines as sodas began to lose luster in recent years.
So as small businesses defend sodas, some of the companies that sell the products to those retailers are touting the health benefits of water. Like I said, it’s complicated.
And where do we place Kara Patt on the path between social good and evil?
Patt is co-owner of Timber City Ginger Beer. The ginger beer is locally made, contains only natural ingredients and is mostly sold at farmers markets. But it has sugar in it. The company tried to avoid sugar, she said, but the drink tasted pretty awful without it.
Maybe we could give her a break. Marisa Waxman, Philadelphia’s first deputy revenue commissioner, said that city’s tax on sugar-sweetened drinks would exempt someone like Patt because she’s not really a distributor.
Making laws is rarely easy or straightforward.
What we do know, as the two doctors who spoke emphasized, is that reducing the amount of sugar in people’s diets can only help improve health outcomes.
Research keeps building a case against the drinks, and governments are beginning to respond to that information. It’s not an easy thing to do with products so deeply embedded in personal habits and business practices.
But it is the right thing to do.