Hawaii Rejects Sugary Beverage Labeling, Tax

Published February 27, 2015

Legislation in Hawaii requiring sugary beverages include warning labels was rejected by the Health Committee of the Hawaii House of Representatives after witnesses including many small businesses and consumers testified against the measure. 

The House and Senate Health committees decided in mid-February to defer HB1438 and SB1270 which would have required sugary beverages to include a warning on beverages stating “Drinking beverages with added sugar contributes to obesity, diabetes, and tooth decay.” Deferring the bills effectively killed them for this legislative session.

 A few days later the Senate Health Committee deferred SB1256 prior to a February 20 legislative deadline, also effectively killing the bill for the legislative session. SB1256 and its House counterpart, HB1439, which was not heard by the House Health Committee, would have imposed a tax of $1.28 per gallon of beverage that has sugar added to it, or one cent per fluid ounce.

For the proposed tax hike, this marks the fourth failure in five years. Supporters of the legislation say the bills will help fight obesity.

House Republican Leader Beth Fukumoto Chang, a member of the Health Committee, criticized the bills for singling out beverages that have added sugar.

“It makes more sense to take a more holistic approach to calories and sugar consumption,” Fukumoto Chang said. “Labeling only sugary beverages could lead to consumer confusion and the belief that restraining from sugared drinks alone is enough for a healthy lifestyle.”

‘Don’t Need More Laws’

Those testifying argued Hawaii already has one of the nation’s highest costs of living, and increased taxation of consumer goods and regulation of small business hit low income families hard.

Pointing to the known correlation between poverty and obesity, Blane Tasaka of Paradise Beverage told legislators the proposed laws could actually increase obesity by increasing poverty

“We don’t need more laws and regulations on this issue, people will make their own choices, and this is just another example of governments over-involvement in personal choices…at the expense of businesses and the economy,” Tasaka told the House committee. “The best thing to help people live healthier is to grow business and the economy, it is at that point that they can afford to make meaningful healthy decisions.”

Andrea Gall-Krasnick, president of Aloha Friday Beverage Company, highlighted what she called the unintended effects of the labeling rules. Her vitamin-enhanced waters use low-calorie natural sweeteners and have only five calories per serving and 10 calories per bottle.

“While my drinks are safe for children, and even people with diabetes to drink, somehow my beverages would be unfairly lumped in with high-sugar drinks based solely on my very low calorie count,” Gall-Krasnick told the House Committee. “Putting warning labels on beverages with only five calories per serving is an arbitrary benchmark – it defies common sense.”

Negative Economic Impact

Others raised the negative impact on the Hawaii economy the warning labels would impose. Lauren Zirbel, executive director of the Hawaii Food Industry Association, argued the labels would drive up beverage costs for consumers.

“Mandating labeling of this kind at the state level creates a situation where producers must either stop supplying products to Hawaii or drastically increase the price of these, and possibly other products, in order to cover the cost of creating Hawaii specific labels,” said Zirbel. “Health and safety labeling is mandated at the national level in order to avoid placing consumers and producers in this type of situation.”

No hearings were held on the tax measure, but a coalition of individuals, families, businesses and community organizations calling themselves No Hawaii Beverage Tax explained the case against the one cent per ounce tax on sugary beverages.

“Hawaii’s obesity problem is bigger than soda,” the group explained on their web site. “Science shows that calories from all foods count. Placing a discriminatory tax on beverages will not change behaviors or teach children about a healthier lifestyle.”

No Hawaii Beverage Tax also points to the economic impact of the proposed tax. “At a time when unemployment is high and the economy is unsteady, adding a new tax on common grocery items like beverages will put well-paying jobs at risk. It would also hurt small businesses, like neighborhood grocery stores and convenience stores that will be harmed by shrinking sales.”

Andrew Walden ([email protected]) edits www.HawaiiFreePress.com.