Soda industry spends $7.7 million to defeat SF sugar tax — so far

Co-owner Taylor Peck stocks sodas at the Fizzary shop in the Mission District. San Francisco voters are considering an unprecedented 2-cents-per-ounce tax on sugary drinks. Co-owner Taylor Peck stocks sodas at the Fizzary shop in the Mission District. San Francisco voters are considering an unprecedented 2-cents-per-ounce tax on sugary drinks. Photo: Peter Earl McCollough / Special To The Chronicle Photo: Peter Earl McCollough / Special To The Chronicle Image 1 of / 12 Caption Close Soda industry spends $7.7 million to defeat SF sugar tax — so far 1 / 12 Back to Gallery

The American Beverage Industry has spent $7.7 million— the second-highest amount ever spent to defeat a San Francisco ballot proposition — on its effort to try to prevent the city from becoming the first in the country to tax sodas and other sugary drinks.

Proposition E on the Nov. 4 ballot is drawing plenty of national attention — and plenty of cash from the soda industry. Its campaign contributions so far trail only the nearly $10 million Pacific Gas and Electric spent to defeat a public power measure in 2008.

The soda industry’s spending is revealed in 70 pages of campaign finance forms just filed with the San Francisco Ethics Commission. Some of the biggest expenditures include $820,000 to well-known San Francisco campaign consultants John Whitehurst, Sam Lauter and Mark Mosher and $2.6 million to Goddard Gunster, a Washington, D.C., public affairs firm.

The soda industry has also paid for polling, for a talent agency to find actors for its commercials, for billboard space around the city, and for advertising space on just about every local radio and television station in the Bay Area.

It has also paid local political clubs, covering the ideological spectrum from the San Francisco Republican Party to the Harvey Milk LGBT Democratic Club, to produce slate cards mailed to voters to announce their endorsements including No on E.

The spending so far is enough to pay every registered voter in San Francisco $15.50.

The American Beverage Association has also paid an additional $1.4 million to defeat a soda tax measure on Berkeley’s ballot, spending less there to reflect the smaller media market, according to Roger Salazar, a spokesman for the campaign to defeat Prop. E.

'Eyeball popping’ numbers

“It’s extraordinary, it’s eyeball popping,” Supervisor Scott Wiener, an author of Prop. E, said of the soda industry’s spending so far. “Not surprisingly, the corporations that are profiting from selling disease-causing products are spending as much money as it takes to defeat a smart public health measure.”

Prop. E would levy a 2-cents-per-ounce tax on sodas and other sugar-sweetened drinks, including some juices, coffees and flavored waters. It is expected to raise more than $31 million a year. The money would go to children’s nutrition and physical education programs.

The campaign to pass Prop. E has raised $225,000 so far, mostly in small donations including several from medical groups and professionals.

Opponents of the proposition argue it’s a “nanny state” attempt to control what people eat and drink — and that it would make groceries more expensive in a city with a cost of living that’s already outrageous.

Salazar said the big spending by the soda industry is necessary.

“We have a responsibility to inform the voters that this tax will raise the cost of living for thousands of San Franciscans already struggling in an increasingly expensive city,” he said. “Someone needs to give voice to the consumers and small-business owners impacted by these misguided propositions.”

Wiener scoffed at the idea the soda industry is paying millions just to get the voices of small-business owners and struggling residents out there. He said it’s obvious the soda industry cares only about its bottom line and knows that the passage of a soda tax in San Francisco could prompt other cities and states to adopt their own.

“When this election is over, they’re going to be out of here — they don’t care about the health of our community,” Wiener said. “Coke and Pepsi aren’t going to have to deal with the fallout of the health crisis. We are.”

Tougher task in S.F.

Berkeley’s measure needs only the majority of voters to approve it since its tax — 1 cent per ounce — would go to the city’s general fund. Proponents believe they stand a good chance in that famously liberal city.

San Francisco’s Prop. E, however, needs two-thirds of voters to support it because its taxes go to a specific purpose.

Wiener said it will probably be close.

“Are we guaranteed to win? Absolutely not,” he said. “We have a shot at winning, and we’re just going to keep working and keep building community support.”

John Maa, a surgeon and a member of the San Francisco Medical Society, which has endorsed Prop. E, said the soda industry is clearly afraid that city voters who have long supported cigarette taxes and other similar public health measures will support taxing sodas.

“This could be the tipping point for a wave of similar legislation across the nation,” he said.

He quipped that the soda industry could be hurting after sinking a total of $9.1 million into defeating the San Francisco and Berkeley measures.

“They might have to raise soda prices on their own to make up for it,” he said.

Heather Knight is a San Francisco Chronicle staff writer. E-mail: hknight@sfchronicle.com

Twitter: @hknightsf

To see the latest campaign finance reports on San Francisco propositions, go to: http://bit.ly/1uymiJc