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How ‘Big Soda’ used its clout to stop 5 of 5 California laws to regulate sugary drinks

How ‘Big Soda’ used its clout to stop 5 of 5 California laws to regulate sugary drinks
California Sen. Bill Monning (D-Carmel) displays the amount of sugar in a 20-ounce bottle of Coca-Cola. Monning pushed legislation this year to place health warning labels on sugary drinks. He gave up Tuesday, conceding he did not have the votes to advance his bill. (Samantha Young / Kaiser Health News)

California is known as the state that took on the tobacco industry, challenged the NRA on firearms restrictions and passed other legislation framed as breakthroughs in safeguarding public health.

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But over the last two years, California health advocates have been unable to overcome the beverage industry’s clout as they pushed legislation to regulate sugary drinks and sodas.

On Tuesday, a bill to place warning labels on sugary drinks was shelved, meaning that state lawmakers have rejected or shelved all five bills introduced this year to reduce consumption of sugary drinks.

It is a remarkable score card for the industry, which brought in an army of lobbyists and consultants, most of them political insiders, and poured contributions into the campaigns of lawmakers, including 14 of the 15 members of the committee where the last bill was shelved Tuesday.

Supporters of the bills, including Assemblyman Kevin McCarty (D-Sacramento), likened what they call “Big Soda” to the immense clout that “Big Tobacco” has exerted in the Capitol in the past.

“This is a tough fight,” McCarty said during a hearing this week. “There is big business and big industry behind this (opposition) just like we faced in the tobacco fights.”

Lawmakers heard harsher words from Sen. Bill Monning (D-Carmel), who was forced Tuesday to pull his bill requiring health warning labels on soda cans because it lacked enough votes in the Assembly Health Committee.

“Unfortunately the power of this industry is influencing a health committee in the state Legislature, a health committee that should be here to protect the health of the people you represent,” Monning angrily told the panel’s members during the hearing.

Beverage industry representatives reject claims their clout ruled the day in Sacramento. Instead, they say, lawmakers heard their arguments that the proposed legislation, including higher taxes, was an overreach and not supported by the public.

“We will continue to work with the legislature and the administration on effective ways to address their budgetary and public health concerns, while ensuring that food and beverages remain affordable and accessible for all Californians,” said Steve Maviglio, a political consultant and spokesman for the American Beverage Assn. after Tuesday’s hearing.

It was the fifth time in as many years that health warning bills failed to make it to the governor’s desk.

Blocked in the Legislature, groups including the California Medical Assn. and the California Dental Assn., which also have big lobbying operations, are working on a possible measure for the 2020 statewide ballot that would tax soda to pay for programs to reduce obesity, diabetes and tooth decay caused by sugary products.

“Obviously the soda industry is extremely influential,” said Richard Stapler, a spokesman for the dentists’ group.

He said health groups “have had some conversations” with Gov. Gavin Newsom about being part of a potential ballot measure. Despite proposing a soda tax when he was mayor of San Francisco, Newsom has not publicly committed to any future statewide measure.

When asked Tuesday if he’s been in contact with the CMA about the proposed soda tax, Newsom said “not in the last few weeks.” The governor added more pressing issues have consumed his time and that he has not been recently involved in the issue.

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This year’s soda bills, which also would have banned the sale of “Big Gulp” style drinks, were quashed by a campaign led by the American Beverage Assn., a group that represents brands including Pepsi, Coca-Cola, Red Bull and Dr Pepper. The association spent $914,000 on lobbying during the last year, up from $380,000 the year before.

Pepsi and Coke directly spent $283,000 on lobbying in the last 12 months.

The industry has also provided legislators with political contributions, expensive dinners and tickets to movies and professional sporting events, while targeting lawmakers in key positions to impact soda bills.

All but one of the 15 members of the Assembly Health Committee— where Monning could not muster the required eight votes — accepted campaign contributions from the soda industry during the last two years. The industry provided $51,000 to committee members.

The beverage association was joined in opposing the bills by the California Restaurant Assn., the California Grocers Assn. and the California Chamber of Commerce.

The groups noted that similar “warning label” bills failed in the Legislature in 2018, 2017, 2015 and 2014, and they cited a recent court decision that San Francisco’s warning label law was unconstitutional as drafted.

Supporters of the bill cited health studies, including one by the Center for Disease Control that said obesity affected about 93.3 million of U.S. adults in 2016.

More than half of adults in California are either pre-diabetic or diabetic, according to Flojaune Cofer, a health expert with the group Public Health Advocates. She told lawmakers that consuming one sugary drink every day doubles a child’s chance of cavities.

However, soda industry representatives said they have been selling more low and no-sugar drinks, making up about half of all drinks consumed. They questioned singling out one product when many other kinds of food, including candy and pastries, also have sugar.

John Latimer, a lobbyist for Pepsi, said cans and bottles already have nutritional information, including the amount of calories and sugar. Maviglio added that the industry was committed to working with groups “on meaningful ways to reduce the sugar people get from beverages.”

Before joining the private sector, Maviglio was deputy chief of staff to then-Assembly Speakers Fabian Nunez and Karen Bass, he was a communications consultant for then-Assembly Speaker John Perez, and was press secretary for Gray Davis when he was governor.

He is not the only political insider hired by the soda industry.

The association’s campaign against this year’s legislation was led by its vice president, Fredericka McGee, who previously served as general counsel and deputy chief of staff to former Assembly Speakers Toni Atkins and Perez, and was general counsel to former Speakers Bass and Nunez. Atkins is currently the leader of the state Senate.

The two lobbyist firms hired by the association are chocked full of Capitol alumni. The lobbying firms include California Advocates, whose vice president, Dennis Albiani worked in the administrations of Govs. Arnold Schwarzenegger and Davis.

The firm also includes former staffers for Sen. Anthony Portantino and Assemblywoman Cristina Garcia and former Assembly member Catharine Baker.

Latimer, who was the lead lobbyist testifying against warning labels, spent nearly a decade working as a chief of staff and chief consultant for Democrats in the state Legislature, and helped get some elected.

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Other Capitol veterans working for Latimer’s lobbying firm include Dean R. Grafilo, who served as head of the California Department of Consumer Affairs under former Gov. Jerry Brown and was chief of staff to Assemblyman Rob Bonta (D-Alameda), who is a member of the Assembly Health Committee.

“Taking on special interests like Big Soda is never easy,” said Assemblywoman Buffy Wicks (D-Oakland), who was forced to sideline a bill that would have prohibited stores from selling sugary sodas in checkout areas where customers make impulse buys. She said this week she plans to pursue her proposal next year.

“It’s time our state acts to end Big Soda’s lock on California and puts our health first,” said Wicks, whose hometown is among the cities that passed local soda taxes.

Last year, the industry pressured the Legislature to ban other cities from seeking voter approval of new taxes on sodas until 2031. Lawmakers approved the law under threat by the industry to seek a state initiative that would have required cities and counties to obtain supermajority approval from voters to raise any new taxes.

The industry and health groups are expected to continue their battle when a new initiative is likely proposed for the November 2020 ballot.

The initiative is still being worked on, but a draft measure released last year proposed a tax of two cents per ounce on sugary sodas to discourage consumption and fund public health programs.

“That’s the level of tax where there is a measurable decrease in consumption but it also can raise a substantive amount of money to fund the kinds of public health programs needed to combat obesity, diabetes, tooth decay and other impacts of sugary beverage consumption,” said Stapler, the dental association spokesman.

“Our goal is to raise some badly needed funding for these public health programs but also to reduce that soda consumption,” he said.

If an initiative is introduced later this summer, supporters would likely begin collecting signatures in January.

These five soda bills were introduced in February and none of them is still alive for action this year:

1. Tax on sodas

AB 138 by Assemblyman Richard Bloom (D-Santa Monica) would have imposed a tax on sugary drinks including sodas of two cents per fluid ounce. The bill did not get out of committee.

2. Soda discounts

AB 764 by Assemblyman Rob Bonta (D-Alameda) would bar beverage companies from giving a distributor or retailer a discount as an incentive to sell sugar-sweetened sodas, which would make the product more attractive to consumers. Held until next year after it failed to win support in the Assembly.

3. “Big Gulp” ban

AB 766 by Assemblyman David Chiu (D-San Francisco) prohibits a retailer from selling an unsealed beverage container that is able to contain more than 16 fluid ounces, except for a container for water. The bill targeting “Big Gulp” style sugary drinks did not get out of committee.

4. No sodas near checkout stands

AB 765 by Assemblywoman Buffy Wicks (D-Oakland) would prohibit stores from putting sugary sodas for sale in the checkout areas where impulse buys are made. The bill did not get out of an Assembly committee.

5. Health warning labels

SB 342 by Sen. Bill Monning (D-Carmel) would require a health warning label to be placed on cans and bottles of sugary drinks. Monning held the bill until next year because it lacked the votes to pass a committee this week.

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