Hawaii restaurant owners oppose new tax on sugary drinks

HILO — Some Hawaii restaurant owners have come out against a proposed bill to place a 2-cent tax on each fluid ounce of sugar-sweetened beverages sold in the state.

The bill is part of a legislative package introduced last week by Democratic Gov. David Ige, Hawaii Tribune-Herald reported Sunday.

The tax would result in a 12-pack of 12-ounce (35-centiliter) cans of soda costing an additional $2.88, while a six-pack of 20-ounce (59-centiliter) bottles would cost an extra $2.40.

The tax would affect non-alcoholic beverages containing “added caloric sweetener,” which includes many juice and tea beverages. The measure would not affect diet sodas, which do not use sugar-based sweeteners containing calories.

The bill cites negative effects of sugary beverages on health, along with the tax’s potential to help dig the state out of its massive budgetary hole caused by the COVID-19 pandemic.

The bill claims the tax would have generated $65.8 million for the state if it was imposed in 2020.

Victor Lim of the Hawaii Restaurant Association said similar sugar taxes have been suggested elsewhere in the country, but only enacted in a handful of places and never on a scale greater than a municipality.

The tax targets small businesses and people without disposable income during the pandemic, Lim said.

“These taxes are very regressive,” Lim said. “It affects low- and middle-income people much more than upper-class people.”

Sugary drinks have been linked to health problems in overweight or obese adults and children, including 25% of Hawaii youth and more than half of the state’s adults.

Lim said restaurants receive their highest profit margins from soft drink sales and cutting into the revenue now would likely cause more restaurants to close.

“It’s just passing the costs to the consumer,” Lim said. “When you start taxing, owners are just going to be raising the costs for food.”