Is The Berkeley Soda Tax Working? Anti-Obesity Law Makes $116K In Revenues In First Month

A penny in tax for every ounce of soda sold in Berkeley, California, is adding up, generating $116,000 in its first month, say city leaders. The tax, the first of its kind in the nation, aims to discourage people from drinking soda, energy drinks and other sweetened beverages to stem rising rates of obesity, diabetes and related health problems.

"What we really want to do, in 10 years, is collect no [soda] tax," Councilman Laurie Capitelli said Monday, the San Jose Mercury News reported. In other words, the ultimate goal is to stop people from consuming such drinks entirely. Capitelli estimated that the first year of the tax could bring in $1.2 million in revenue. With the tax, the price of a can of soda in Berkeley rose by 12 cents, and a one-liter bottle by 68 cents.

The consumption of soft drinks and other beverages laden with sugar has risen steadily over the past several decades, reports the U.S. Centers for Disease Control and Prevention. This trend has been linked to rising rates of obesity and Type 2 diabetes, among other health problems. On any given day, about half of the U.S. population will drink something with sugar in it, the CDC estimates.

Like many other communities, Berkeley has grappled with how to curb increasing weight gain, obesity and diabetes and all their attendant economic, personal and health costs. It decided to do so by targeting sugary drinks and "discouraging their distribution and consumption in Berkeley through a tax," the ordinance reads. The measure was not without controversy. Some have slammed it as elitist and an attack on businesses. But others have called for the tax to be imposed across California.

Whether the tax is actually curbing consumption in Berkeley remains to be seen. But some research indicates that raising taxes on soda can have an effect. One Duke University study, for instance, found that a 20 percent soda tax reduced household spending on soda, as well as how much sugar its members ultimately drank.

The city has not yet decided how it will spend the proceeds of its new tax. A new Sugar-Sweetened Beverage Panel of Experts is scheduled to meet Tuesday to discuss the city's options.