75% of California’s Berkeley voters approved the introduction of a penny-per-ounce tax on soft drinks. The city of Berkeley pioneers the “tax on sugar” taking effect on 1 January 2015. The tax is paid by distributors of sugary drinks, sodas, energy and sports drinks, ice teas, fruit juices with added sugar and sugary coffee syrups (such as, for instance, Starbuck’s coffee Frappuccino). The tax is focused on high sugar and low nutritional value drinks. Diet drinks without added sugar, 100% juice, coconut water, milk-based drinks and alcoholic beverages are exempted.
Tests conducted in August 2015 showed that the price of Coke and Pepsi increased by less than half of the tax introduced, which shows that the distributors took some of the tax burden on themselves in order to avoid jumps in sales prices.
The revenue from the tax enters the general fund of the City of Berkeley who will use it to support programs to reduce sugary drink consumption and improve children’s health.
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