Sugar-sweetened drinks in Berkeley, California, might get a little more expensive.  This week, voters in Berkeley, California went to the polls and supported passing a one-cent-per-ounce tax on the distribution of sugary beverages.  The November 2014 ballot initiative overwhelmingly passed with more than 3/4 of voters favoring the tax.  The vote makes Berkeley the first city in the country to pass a soda tax according to the USA TODAY.  A similar initiative across the Bay in San Francisco, however, failed to garner the 2/3 support of voters necessary to pass.

The Berkeley tax is another chapter in the California “Sugar Wars.” Earlier this year, a California’s state senator’s proposed legislation requiring sodas and other sugar-sweetened drinks to carry a label was voted down by the California Assembly Committee on Health by an 8-7 vote on Tuesday, June 17th.  The proposed label would have required the following language “CALIFORNIA SAFETY WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay.”  See the related post here.

The Berkeley sugar tax covers soda pop, energy drinks, and juices with added sugar.  According to the city attorney’s “impartial analysis,” the tax would be imposed on the distribution of certain sugary beverages, and would be paid by the distributor, not the consumer (at least not directly).  Some drinks are not subject to the tax, including baby formula, drinks where milk is the primary ingredient, and alcoholic beverages.

The vote makes Berkeley the first city in the country to pass a soda tax.

The question on the ballot was: Shall an ordinance imposing a 1¢ per ounce general tax on the distribution of high-calorie, sugary drinks (e.g., sodas, energy drinks, presweetened teas) and sweeteners used to sweeten such drinks, but exempting: (1) sweeteners (e.g., sugar, honey, syrups) typically used by consumers and distributed to grocery stores; (2) drinks and sweeteners distributed to very small retailers; (3) diet drinks, milk products, 100% juice, baby formula, alcohol, or drinks taken for medical reasons, be adopted?

The measure passed with 75.12% of voters answering “yes.”

The Berkeley sugar tax has implications across the beverage industry.  You can find The American Beverage Association’s “Statement on Soda Taxes” here.  Manufacturers and distributors of taxable drinks will, at a minimum, need disclosure and compliance strategies.  Whether and how this, and other future tax initiatives around the county, will impact potential sugar/beverage-related litigation strategies remains to be seen.   For more discussion on the Berkeley tax from NPR click here, and from Forbes, click here.