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Is San Francisco Big Soda's Waterloo?

Ron Russell | July 2, 2014 | Story

The mailer does not mince words. "Rising cost of living. Escalating rents. Impending evictions," it announces in bold type superimposed over an image of City Hall bathed in bloody red. "What is City Hall’s plan?" Inside, over a sweeping view of the city, the text declares, "A big new tax on beverages that will raise our grocery bills? Seriously?"

What it also says, without saying it: The American Beverage Association, which paid for the flyer, is fixing for a fight. Several months before Supervisor Scott Wiener’s two-cents-per-ounce soda tax measure is scheduled to go before voters in November, the ABA, funded with millions from PepsiCo, Coca-Cola, and other soft drink manufacturers, has already unleashed a barrage of mailers like this one, which arrived in mailboxes in March. They made use of zeitgeist-y messaging, seeking to tie the measure to the housing crisis and suggesting that a tax reaping $31 million a year—in a city and county with an $8 billion budget—will significantly increase already sky-high living costs. Even the name of the group fronting Big Soda’s campaign pushes the theme: Coalition for an Affordable City.

It’s all part of a strategy that observers suggest could cost the soda industry tens of millions—but one that has been universally successful thus far. New York, Philadelphia, and smaller communities around the country have all tried to levy per-ounce soda taxes, and they’ve all been knocked down by a multimillion-dollar full-court press from an industry with deep pockets and plenty to fear from a new tax. In 2012, the city of Richmond tried a penny-an-ounce tax, only to be clobbered by 67 percent voter rejection after Big Soda poured $2.5 million into the largely minority East Bay community, outspending supporters there 60 to 1. The results were even more pitiful in the Los Angeles suburb of El Monte, where, in the face of heavy industry spending, 77 percent of voters rejected a similar tax the same year. According to the Center for Science in the Public Interest, from 2009 to 2011, Big Soda spent an estimated $70 million to produce a string of victories at the ballot box and in state legislatures.

But this isn’t the rest of the country, and this isn’t 2012. San Francisco was, after all, the first major American city to successfully legislate against plastic water bottles and Happy Meal toys. Moreover, the tide of public perception about obesity appears to be turning rapidly. According to a November Gallup poll, more Americans now believe that obesity—not cancer or heart disease—is the most concerning health ailment facing the country. In California, a Field poll found nearly two-thirds support for a soda tax to go toward school nutrition and physical activity programs for children.

The San Francisco measure takes its cue from those findings, designating its revenue specifically for San Francisco Unified School District nutrition programs and other health initiatives. If successful, the tax would hit Big Soda where it hurts—beyond the pocketbook, in the arena of public opinion. In fact, advocates here liken their work to early efforts to pass antismoking laws a half century ago, before Big Tobacco began to lose its grip.

“This is the first real attempt anywhere in the country where those leading the effort [for a tax] can match the capacity of the beverage industry,” says Dr. Harold Goldstein, executive director of the California Center for Public Health Advocacy. Indeed, San Francisco’s showdown with Big Soda bears little resemblance to those in Richmond and El Monte, where the campaigns were run by well-meaning amateurs who were no match for the industry’s professional consultants. In Richmond, for example, the most visible symbol of the anti-soda contingent was retired cardiologist and former city councilman Dr. Jeffrey Ritterman, who marched around town pulling a Radio Flyer wagon loaded with 40 pounds of sugar (the amount, he says, that a typical young person consumes in a year). It made a great visual for 60 Minutes, but its message was trumped by the other side’s deluge of mailers and paid canvassers.

To do battle here, Big Soda has turned again to the political consultants that ran its Richmond operation—the San Francisco firm of Barnes Mosher Whitehurst Lauter and Partners (BMWL), whose Sam Lauter is a registered lobbyist with the Washington, D.C.– based ABA. But this time, soda tax supporters have hired a team of their own—Oakland-based partners Maureen Erwin and Maggie Muir, both of whom used to work at BMWL.

“We’ve done a ton of groundwork,” says Erwin. Backers of the tax have spent months cultivating grassroots support among countless civic, political, and neighborhood groups. They’ve garnered endorsements from District Attorney George GascoĢn and Senator Mark Leno, as well as a majority of the Board of Supervisors. Perhaps most crucially, a broad swath of the education and pediatric health community—including the local teachers’ union, several PTAs, and the California Nurses’ Association—has signed on to the effort, further underscoring the message that taxing soda is about public health, not boosting revenues. And the sleekly designed calls out the opposition’s activities and lays bare its ties to the soda industry.

Recent polls suggest a photo finish for the measure, which requires a two-thirds majority to pass.

But even if it passes, few expect Big Soda to go quietly. “I think San Francisco has a good shot,” says public health attorney and longtime industry critic Michele Simon. “But if the industry loses, it will turn to Sacramento and seek preemption [from any new local tax].”

But if the industry isn’t giving up, neither is San Francisco. “We think we know how to win,” says Wiener.

Originally published in the July issue of San Francisco

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