SAN FRANCISCO - JANUARY 16: (FILE PHOTO) Cans of Coca-Cola are seen on the shelf at Tower Market January 16, 2004 in San Francisco, California. Coca-Cola Enterprises reported October 28, 2004 that profits fell 20 percent in the third quarter. The soft-drink manufacturer posted earnings of $207 million compared to $259 million in the same quarter last year. The company cited bad weather, the slow economy and a turn away from regular soft-drinks as reasons for the drop. (Photo by Justin Sullivan/Getty Images)

Chicago aldermen consider tax on pop, other sugary drinks

SHARE Chicago aldermen consider tax on pop, other sugary drinks
SHARE Chicago aldermen consider tax on pop, other sugary drinks

Health advocates and retailers squared off Tuesday on a plan to fight soaring obesity rates by taxing Chicago consumers of soda pop, energy drinks and other sugary beverages anywhere from 15 to 30 cents a container to a penny an ounce.

The City Council’s Health Committee held a marathon hearing on a proposal by its chairman, Ald. George Cardenas (12th), to follow the lead of 33 states that already impose a sales tax on sugary beverages. Six other states slap on excise taxes in addition to a sales tax.

For retailers, fighting the proposal comes down to money. They’re still hurting from the city’s imposition of a Cardenas-championed tax on bottled water.

Mike Ciaccio, political director for the Teamsters Joint Council 25, which represents unionized beverage delivery and warehouse employees, cited a federal study that showed a 12 percent reduction in consumption for every 10 percent increase in taxes on sugary drinks. That would translate to a reduction in sales, production and jobs, he said.

“However well-intentioned a soda tax might be, it would unfairly target middle-class workers,” Ciaccio argued. “These are jobs where someone could spend 30 or 40 years with one company and retire with a modest pension – the kind of jobs we’re trying to create.

“Something as regressive as increasing the tax on sugar-sweetened beverages would simply take away those jobs,” he said. “And there will be a trickle-down effect to supermarket employees, restaurants and small business owners.”

Dan Raskin, the fourth-generation owner operator of Manny’s Cafeteria and Delicatessen near downtown, said raising taxes on pop could easily lead to “depressed wages, fewer restaurants opening and less hiring.”

“Consumers have a choice,” Raskin said. “And raising taxes will be scaring them away from restaurants, in general. The restaurant industry is just beginning to come out of the recession. Now is not the time to stamp out budding growth in an industry which provides an entrance to the workforce for many young people.”

On the other side of the debate, health experts argued that one-third of U.S. children are overweight or obese, in part because they consume too many sugary drinks served in bigger sizes than ever before, at a cost 33 percent cheaper than they were in 1978.

“We know that taxing at the right level can reduce consumption of sugary drinks and that reducing consumption will help reduce the prevalence of obesity,” said city Health Commissioner Dr. Bechara Choucair, noting that the beverage industry spent $948 million on marketing in 2010, more than half of that directed at children. “A growing body of evidence suggests that reducing consumption of sugary drinks could be the single-most effective intervention in reducing the prevalence of obesity in the United States.”

Dr. Goutham Rao, a pediatrician at the University of Chicago’s Pritzker School of Medicine, noted that consumption of sugary drinks tends to be higher in impoverished inner-city neighborhoods.

“If we do tax sweet drinks and it reduces consumption and that money is used to create a healthier food environment in those communities, aren’t we doing everybody a good thing?” Rao said. “Isn’t that … a form of social justice?”

The hearing ended with a pledge from Cardenas to work with the Health Department, the business community and the Chicago Public Schools on a tax policy that encourages healthy behavior without reducing jobs or penalizing any one industry.

“We’ll even look at the tax on bottled water with the potential to even repeal it if it helps to get us to a better place,” said Cardenas, who noted that the five-cents-a-bottle tax on bottled water that he championed might have had an unintended consequence by driving consumers to cheaper, sugar-filled soda pop.

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