Coca-Cola and PepsiCo face a wave of new soda taxes after four U.S. cities voted to pass the measures, part of an escalating war on sugary drinks.
Proposals to slap a 1-cent-per-ounce tax on sugar-sweetened beverages are poised to pass in the California cities of San Francisco, Oakland and Albany. In Boulder, Colo., meanwhile, a 2-cents-per-ounce tax is leading. Cook County, which includes Chicago, also has a similar penny-per-ounce tax written into its proposed 2017 budget.
The levies bring fresh headaches to soda companies already coping with a shift in consumer tastes away from their core products. Per capita soda consumption in the U.S. fell to a 30-year low in 2015, according to data compiled by Beverage Digest, a trade publication. But Coca-Cola and PepsiCo both announced plans to deal with their sugar problems last month, including a move toward smaller beverage sizes.
The new taxes underscore the need to take more dramatic action, according to Ali Dibadj, an analyst at Sanford C. Bernstein & Co.