retail news in context, analysis with attitude

In Seattle, there seems to be a problem.

There’s a soda tax in the city - 1.75-cents per ounce. In the first 12 months after it was imposed, the Seattle Times writes, “the program brought in 49 percent more money than expected ($22.4 million versus $15 million estimated).”

It is these “surging revenues” that are seen as the problem. City health officials, when they approved the tax, said they were doing so as a way of discouraging people from drinking sugary soft drinks, where are seen as bad for people’s health. The tax, according to the Times “roughly doubles the price for a 12-pack of soda, so the city estimated consumption could logically plunge up to 40 percent.”

Boy, were they wrong. It appears, the Times writes, that “soda consumption is going only up. The city budget office said revenues will be 8 percent higher this year than last (to about $24 million) and will continue to go up, though at a slower rate, in 2020 … more revenue coming in equals more ounces of soda being sold in Seattle. If the ounces sold is advancing at 8 percent this year, which is faster than Seattle’s population and job growth, it’s difficult to imagine how consumption of soda could be declining at all, let alone by double digits.

“In fact the budget office showed that for this year, the soda tax is the city’s fastest-growing revenue source — faster growing than property, sales or real-estate taxes and faster than parking-meter or utility fees.”
KC's View:
Naturally, even as people debate the health implications of all this, local politicians are fighting about what to do with all the money.

And apparently, in other cities where soda taxes have been tried, like Berkeley and Philadelphia, after a period when consumption went down it looks like people started to increase how much soda they were drinking, even at the higher prices.

I personally don’t have a huge problem with soda taxes. I think that over-consumption can create health problems, and health problems can create public policy issues, and so it makes sense to craft a nuanced response to them. But it looks like this response wasn’t nearly nuanced enough.

Which makes me think, maybe we ought not to take this approach. Not that we should ignore potential health and public policy issues, but maybe, just because the world is a tough place to live in, we ought not be too worried if people want to have a Coke. It makes them feel better, and feeling better is something that these days shouldn’t be underrated.