A proposal by New York Governor David Paterson to tax sodas at the rate of one cent per ounce has the beverage industry girding for a showdown.
The American Beverage Association, which represents Coca-Cola Co., PepsiCo and others, called the proposal "a money grab" that will threaten jobs and squeeze grocery budgets.
Both enemies and friends of the tax seem to agree that it would reduce soda sales to some extent. Michael Jacobson, executive director of the Center for Science in the Public Interest, said the tax could cut soda consumption by 10 percent. Plus, "just talking about a steep soft-drink tax could embolden other states or cities to levy a tax," said Jacobson, a longtime critic of the soda industry whose group has sued Coca-Cola over labeling issues.
Beverage Digest said the tax, if levied at the cash register, could increase the price of a 12-pack by $1.44 and that of a two-liter bottle by 67 cents; the net effect would be a "negative impact on the beverage business."
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