Oakland grocers raise concerns about soda tax Measure HH

Thirty-five years ago, Abdul Talev’s grandfather opened a small grocery store in the Fruitvale neighborhood of Oakland. Today, with the family business in his care, Talev is worried a new soda tax will cause him to lose business, or even worse, force him to close his doors.

 The controversial tax Talev is referring to is Measure HH on Oakland’s November ballot. Measure HH would impose a one cent per ounce tax on the distribution of sodas and other sugary beverages. If voters approve the tax, the revenue stream could raise up to $12 million, which would be applied directly to the city’s general fund.

“The legislators are essentially saying, I want to help you by taxing you,” Talev said. “That just doesn’t make any sense. Taxing people is not the solution, educating people is the solution.”

Supporters and critics of Measure HH are debating whether the tax will fall only on soda distributors, or if it will affect store owners and their customers by forcing them to raise prices on other groceries to compensate for the tax.

According to Diane Woloshin, director of the Coalition for Healthy Oakland Children, a group that supports policies and efforts that improve children’s health, the tax will only be on the distributors of sugary beverages, because cities cannot directly tax each bottle of soda sold, only the state can. When asked about how the city will prevent grocery stores from spreading the cost to other items such as bread or cheese, Woloshin said, “Our experience is that that is not happening in Berkeley,” a city that has had a similar tax since 2014.

For Talev’s store, Mi Carnal Market, it’s about staying afloat in an expensive city. In his own market, Talev said it wouldn’t be smart to raise the price of one item. He believes he would be forced to spread the cost to other items in his store, such as meat and produce. “I just can’t understand why the leaders are turning a blind eye to what this really is,” Talev said. “Distributors aren’t going to just absorb this tax, so it will be passed on to grocery stores and markets and eventually passed on to the consumers.”

He also said raising the price of one item would cause people to leave Oakland and shop at larger chain stores in neighboring cities like San Leandro, fewer than 10 miles from his store. “We are already struggling to keep people in our neighborhood and in our stores because of public safety issues. As soon as it’s dark, it’s dead here,” Talev said. “This tax just gives people an extra boost to leave our neighborhood.”

Talev is not the only small business owner worried about the effects of another tax. More than 300 Oakland businesses have agreed to sign a petition to help the No Oakland Grocery Tax campaign’s efforts to defeat the tax. The campaign argues that the tax will cause grocery store owners to make up the extra cost by raising the prices of groceries throughout their store such as bread, cheese and milk.

“These business owners are upset because at a time when living in the Bay Area is at all time high, it’s going to get even tougher,” said Joe Arellano, spokesperson for the No Oakland Grocery Tax Campaign. “They are going to have to figure out how to make up that cost and are forced to raise prices.”

Officials on the Oakland City Council have said the funds raised will be allocated to the city’s general fund for spending on health education in the community and schools. But Arellano said that is a part of the measure that his campaign is concerned about. “When we talk to people, the most eye-opening thing they learn is that this money is directly funneled into Oakland’s general fund,” Arellano said. “They make it seem like this is going to be used for education about health issues but it could be used to fix roads, for paying police officers, anything.”

But Oakland also has a campaign dedicated to getting Measure HH passed, called Oakland v. Big Soda. Volunteers and campaign staff gathered on Saturday morning for the unveiling of the campaign’s new headquarters near Rockridge BART and to talk to residents about the measure. Volunteers clad in “Sugar is Killing Us” t-shirts received training before heading out to Oakland neighborhoods to convince residents to vote “Yes” on the measure.

The campaign headquarters resembles an office building from the outside, but near the front door, large campaign posters greet volunteers. “You wouldn’t eat 22 packs of sugar, why are you drinking them?” asks a poster on the wall. In the main room, a row of drinks lines a table with a plastic bag of sugar in front of each drink to show how much sugar each bottle contains.

Volunteers at the campaign said that sugary drinks are the number one source for added sugar in the average American’s diet and lead to an increased risk of obesity and chronic diseases. Campaign fliers that the group was set out to distribute stated that half of all African American and Latino children will develop Type II diabetes in their lifetime.

Oakland City Councilmember Rebecca Kaplan (at-large) attended the event to encourage supporters and said that the soda tax is not going to be used as a grocery tax. “If this is a tax on groceries, why aren’t the milk companies fighting it?” Kaplan asked, referring to the money the American Beverage Association (ABA) has spent to fight the tax. The ABA is an industry trade association that represents the non-alcoholic beverage industry, such as PepsiCo and Coca-Cola.  The association disclosed spending $600,000 for the first six months of 2016.

According to a study by students at the UC Berkeley School of Public Health published in August in The American Journal of Public Health, consumption of sugary beverages has seen a 21 percent drop in Berkeley since the implementation of the tax in March, 2015. The study also found that Berkeley residents reported drinking 63 percent more water and were more likely to choose water over soda.

Talev said the health of children is a valid concern. “People think that being opposed to this tax means I’m promoting people to drink these drinks,” Talev said. “But I’m opposite of that. I want people to make healthy choices but on their own. We can’t force our communities to make healthy choices.”

Talev said that the Oakland City Council should have thought about who the tax would affect before voting to put the measure on the ballot. “I believe if they had took time and actually come out to visit small businesses, we could have avoided all of this,” Talev said. “No one asked small businesses what we thought about this and it’s going to impact us the most.”