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Soda industry pours millions into campaign to defeat Richmond tax

Rex Sorgatz/Flickr

The beverage industry has spent nearly $2.5 million to crush a soda tax ballot measure in Richmond, records show, in a costly bid to keep the idea of taxing sugary drinks from spreading nationwide.

“This is basically a battleground in a national debate," said Chuck Finnie, a spokesman for the campaign against Richmond’s Measure N. "The consequence might be that other cities follow suit.”

The measure on Tuesday’s ballot aims to reduce obesity in Richmond by placing a penny-per-ounce tax on businesses that sell sugar-sweetened beverages. The measure would raise an estimated $3 million a year, which local officials have promised to spend on youth athletic and health programs.

If voters approve the measure, Richmond could become the first city in the country to impose a 1-cent-per-ounce tax on sugary drinks, including soda, chocolate milk and so-called energy drinks such as Red Bull.

A similar measure is on the ballot in the Southern California city of El Monte. As of last week, the industry had contributed nearly $1.3 million to defeat that measure, much of it for advertisements targeting ethnic communities.

In Richmond, if opponents win the roughly 15,000 votes they estimate that they need to defeat Measure N, their spending would come to about $165 per vote. That is nearly four times the record amount GOP candidate Meg Whitman spent for each vote during her failed 2010 bid for governor.

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The industry’s spending dwarfs the $69,000 raised by supporters of the measure, campaign finance filings submitted last week show.

Advocates of Measure N say that sugar is a toxin that contributes to obesity and leads to a wide range of other ailments, including diabetes, heart disease and cancer. Recent studies show that the city’s young people have higher rates of obesity than in neighboring communities, with more than half of children overweight. 

Reducing childhood consumption of sugary beverages is key to reducing childhood obesity and its long-term health consequences, said Richmond City Councilman Jeff Ritterman, a retired cardiologist who proposed the measure.

“The real focus here is on our children and the fact that everybody in the medical world has agreed that sugar sweetened drinks are a cause of diabetes,” Ritterman said.

In Richmond, a city of about 100,000, the industry argues that the tax would increase the cost of living for the poor and prompt some families to buy their groceries in neighboring cities, which would be a blow to Richmond shop owners. They also question whether the tax revenue would actually be used to address the problem of childhood obesity.

“It’s going to mean higher prices and higher grocery bills, which will hit families regardless of whether or not they drink soda,” argued Finnie, the opposition spokesman. "They see soda companies as a new revenue stream.”

The Community Coalition Against Beverage Taxes – the leading campaign expenditure group funded by the American Beverage Association – has spent most of the money on advertisements, including No on N signs, billboards and television ads.

One 30-second spot, which is also featured on the No on N campaign website, urges viewers to read the "fine print" on the revenue generated if Measure N passes, which would be directed to the city's general fund and not to specific children's programs.

Proponents say money raised from the tax would be spent to counter the effects of obesity among Richmond’s young people.

The No on N campaign also received a boost from Texas-based movie theater chain Cinemark USA Inc., which has funded advertisements aired at the company’s Hilltop theater complex in Richmond since September. Like the billboards, the ads target low-income families who opponents say would suffer the most from the tax.

To combat the flood of outside spending, supporters of the measure held a town hall meeting Monday at the Bethlehem Missionary Baptist Church, led by Ritterman. Mayor Gayle McLaughlin spoke in favor of the measure, telling dozens of supporters that the city “had to start somewhere” to fight rising rates of obesity.

In early September, Ritterman went to Philadelphia to meet privately with Mayor Michael Nutter to discuss how to secure passage of Measure N. Nutter twice pushed initiatives to impose a 2-cents-per-ounce tax on sugary drinks in Philadelphia – both of which failed in the face of heavy industry opposition.

After the 45-minute meeting in Nutter’s office, Ritterman said he left with a clear conclusion: “He was beaten by them throwing their money around,” he said. “That was the reality of it, and that was what he said we needed to be prepared for. I’m still not sure how you prepare for that.”

Regardless of the outcome at the polls, Ritterman said Measure N has been successful in moving the conversation on childhood obesity forward. While critics say the tax unfairly targets beverages, Ritterman said the societal cost of not taxing sodas would be greater in the long run in the form of increased medical costs and lower workforce productivity for young people.

Ritterman acknowledges the measure may be defeated Tuesday, but he believes that eventually Americans will be convinced of the wisdom of taxing sugary beverages to reduce consumption.

"These soda taxes are coming," Ritterman said. "On one level, if we fail it's a tragedy. On another, we've shed light where there was darkness, and more people understand the issue. We've definitely advanced things."

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