Soda sellers decry proposed fee
on September 13, 2012
For Doug Deaver, Richmond’s proposed cent-per-ounce soda tax would mean more paperwork and less profit. While city politicians argue over public health, government overreach and the influence of outside money, Deaver, who owns a vending machine company, worries more about his bottom line.
If Measure N passes in November, businesses that sell soda, energy drinks, or other beverages with added sweeteners like sugar or corn syrup would be required to keep tabs on exactly how many ounces of those drinks they sell. They would then pay the city one cent per ounce as part of their annual business license fees.
But small business owners say they don’t have a system to keep track of ounces-sold. In addition to driving away customers with higher prices, they say, the tax would mean a lot more bookkeeping.
“It’s called tax insanity,” Deaver said. “It’s insane to have even dreamed this up.” By the time he pays for gas, property taxes for his machines, and other overhead, he said he only makes $0.10-0.15 per soda. If the tax proposal passes, each of the 12-ounce sodas he sells would cost him $0.12 more. He would have to pass that cost on to the customer, which he predicts would affect sales. Then, he said, there’s the cost of the additional bookkeeping.
“We’re going to have to go through a tremendous amount of paperwork to implement this,” he said. “There’s nothing we have that tracks the amount of ounces.”
Deaver’s been in the vending machine business in the East Bay for 40 years, he said. Back in the 1980s his company was one of the biggest in the area. Now it’s just him, restocking one route in Richmond. But if the proposed tax passes, Deaver said he’s leaving, off to somewhere more hospitable. The city council should have thought about what the proposed tax would do to business owners like him, he said. “How many more boarded-up businesses do they want?”
It’s still unclear how city government would actually keep track of local soda sales. The tax would be included as part of the annual business tax most local companies pay, said Antonio Banuelos, revenue manager at the City Finance Department. “Pretty much it’s going to be self-reported,” he said. His department would be in charge of oversight on the tax, although he said that right now the department has no idea how much soda is sold annually in Richmond.
Banuelos said that he’s looking into different computer programs that would help business owners keep track of their soda sales. If the proposed tax passes, there’s a possibility that the city would provide some businesses with the program, he said.
Business owners across Richmond seemed to share Deaver’s sentiments.
Muhamad Nasser, tending the cash register at the Richmond Food Center grocery on the corner of 23rd Street and Cutting Blvd., said he’s not sure how much soda his family’s business sells each week. It would be difficult to track the figure in ounces, he said. The grocery sells at least a dozen different sizes of sugary drinks, many of them measured in fractions of ounces. “Redbulls, they got four different sizes themselves,” Nasser said.
He said he agrees that soda isn’t healthy, but that people will just go outside of Richmond to get their sugary drinks. Walgreens is less than two miles down the road, and is technically in El Cerrito, he said. “They ain’t gonna stop drinking soda,” Nasser said of his customers. “They’re just gonna stop buying it here.”
Codis Evans, sitting behind the counter at CJ’s Barbeque and Fish on McDonald Avenue, rocks in his seat and sings along with the R&B crooner on the radio. He actually got out of the soda business about a year ago, he said—he swapped his fountain for the Pepsi vending machine in the corner, restocked monthly by an outside vendor—but if the tax passes it could still bite into his business. He said that people sometimes come in for the soda and end up buying food. “It would affect our volume,” Evans said. “I’m not sure how much, but it would.”
Muhammad Saleh, owner of the 4th Street Market, in the Iron Triangle, said that he would pass the cost on to his customers, and that the last thing the city’s poor need is another tax. He said while the soda tax might make money for the city, it would probably end up costing the state and federal government. He sells around $1,000 of soda every week, he said, much of it to people living on government assistance. “The government’s going to end up paying the tax,” Saleh said.
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Thanks for the coverage. I would like to see many more interviews of Richmond’s small business owners to paint a complete picture of how the they feel about the tax and how they would adjust to it if it were to pass (it won’t). I’ve spoken with about a dozen business owners and every single one of them has explained that their margins are already very tight and they must pass this cost on to their customers.
The big question is, will they raise only the cost of sugar-sweetened beverages and risk driving customers to other stores, or will they try to spread out the cost by raising the cost of all goods by a smaller amount? The majority that I spoke with favored the latter.
Either way this tax will be shouldered by our poorest residents while the wealthy folks can shop outside Richmond at Whole Foods and Berkeley Bowl and don’t pay any of it. Remember in November folks that this hyper-regressive tax was brought to you by the Richmond Progressive Alliance (RPA) who are obviously lying through their teeth when they claim to oppose regressive taxes that hurt our poor. Taxing Richmond’s poor is *never* the solution!
Muhammad Saleh, owner of the 4th Street Market, in the Iron Triangle makes an excellent point…with so many people on government assistance, it would be the Federal, State and local governments bearing the brunt of this tax. Ironic, isn’t it? But wait! Governments, like corporations aren’t people! So, no real people will be hurt by this new tax! LOL…it would be hysterical if it weren’t so pathetic.
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Obesity affects poor Black and Latino kids more than others. Disease and obesity are regressive in our society and largely determined by corporate advertisement. Pushing sugary drinks on the kids secures large profits for Big Soda, and we all end up covering medical costs. Just like cigarettes.
Mesure ‘N” will reduce a bit the consumption of sugar water and it will give opportunities to play sports to thousands of Richmond kids who today can’t. Small businesses owner will adapt and do fine. They might even make more money offering healthier choices. Vote Yes on N for a healthier Richmond. Less Soda, More Sports = Healthy children!
Why does everyone seem to think that this money will go towards sports programs for our youth?
The only concrete proposal put out so far is Councilmember Ritterman’s where he’s going to require all third graders to learn to swim at the Plunge. What I see in this proposal is a bus company that’s going to get a cushy contract to transport the students from their schools to Jeff’s neighborhood. I see that he’s going to require that this tax money prop up a City owned recreational facility. He hasn’t said anything about whether he’s going to take these students out of school for this or whether he’s going to require them to participate when they’re out of school. If he’s yanking them away from their studies, has he even spoken to the School District to work out the details or get their blessing?
Does he plan to use these tax dollars to prop up youth soccer leagues? Would these be the same people the RPA trots out at thew Council meetings every time they want to show support for their ideas? This wouldn’t be some sort of political pay back, would it?
And if people choose to purchase bottled water instead of sodas, won’t there be profits involved there, too? Actually, the profits for bottled water is even higher than it is for sodas. And many of the water bottlers are owned by the same bottlers of the sodas so the profits are just being transferred from one pocket to another on the same pair of pants.
This is a poorly crafted piece of legislation that seems to have focused on the grand idea while ignoring the details.
Just don’t buy soda. I drink from the tap.
One of the big concerns about this tax has little to do with childhood obesity. The bigger concern is the idea that these self proclaimed overseers have appointed themselves the arbiter’s to come into our homes to tell us what we will be allowed to eat and drink. Councilmember Jeff wants to dictate that we not be allowed to drink sugary sweetened fluids and Councilmember Jovanka has said that she wants to make sure that only healthy foods be allowed to be sold here in Richmond.
Even though America is the home of the brave and the land of the free, they want to dictate to me that I no longer be allowed to visit KFC for my chicken and I not be allowed to wash it down with my Dr. Pepper. Forgive me if I wince but a dinner of boiled kale washed down with tap water doesn’t sound very attractive to me–even if they throw in a zucchini on stick for dessert.
This is about freedom of choice. If they want to educate me about the perils of sugary sweetened fluids that’s fine. If they think they can come into my home and outlaw what I eat and drink, I think they’re overstepping their bounds.
More bureaucractic paperwork for small businesses is never a good thing; though I reserve judgement on the choice/obesity issue, both sides make good points.