June 28, 2018 / 2:57 PM / 24 days ago

California legislature could protect Big Soda from local taxes

June 28 (Reuters) - Big Soda may score a major U.S. victory as California lawmakers weigh a budget bill that would include language preempting future sugar taxes in one of the country's top markets, where a handful of municipalities have voted in favor of such levies.

The legislative tack-on would prevent any local governments from imposing future taxes on groceries including carbonated and noncarbonated nonalcoholic beverages through 2030. This would be a major victory for soda makers in a state where so-called soda taxes gained traction in the San Francisco area in 2014 and 2016.

The measure is seen as a way of avoiding an even broader ballot initiative, supported by the soda industry, that would raise the bar for any locality to raise taxes. State lawmakers are trying to get this measure off the ballot by Thursday's deadline, so they are willing to swallow this as an alternative.

"The soda industry has deep pockets and used them to push the legislature into a no-win situation," said California state Senator Bill Monning, a Democrat who has supported soda taxes as a way to combat chronic health problems such as obesity and diabetes.

If the measure remains on the ballot, Californians in November could vote to require any locality's taxes have a two-thirds vote, rather than simple majority of voters or elected bodies.

A state Assembly hearing is scheduled for Thursday. The measure could be voted on and considered by the Governor later that day, but critics say they consider passage all but inevitable. The Sacramento Bee reported this week that Governor Jerry Brown had dinner this month with officials from the American Beverage Association, PepsiCo Inc and Coca-Cola Co.

"This proposal was not discussed at the dinner," said Lauren Kane, a spokeswoman for the American Beverage Association. She did not respond to a query on what was discussed, and said the group is committed to working with government and public health officials to help reduce sugar consumption.

The ABA says the legislation will protect consumers from potential taxes.

The move is part of a worrying national trend, said Eric Crosbie, a post-doctoral scholar at the University of California San Francisco, who is researching such measures. Arizona and Michigan have already enacted similar legislation.

"The beverage industry and their lobbying arm are doing this very similarly to what we saw in the preemption of tobacco control," he said. "Once it’s in the legislation, it’s difficult to reverse." (Reporting by Chris Prentice; Editing by David Gregorio)

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