Some call it a deft play, others a shakedown.  But the beverage industry won big today in the battle over soda taxes in California, which could have implications beyond just this one industry.

Things had not been going well for bottlers.  Berkeley took the first shot, imposing a penny-per-ounce tax on sugary drinks in 2015, in a successful bid to inspire consumers to switch to healthier beverages.  Other cities took note; last year San Francisco, Oakland and Albany all enacted similar laws.

Bottlers first fought back by raising the ante.  They spent $7M to place a question on California’s 2018 statewide ballot, which if approved would prevent local governments from raising taxes for any reason except by a supermajority vote.

Now the industry is offering to withdraw the ballot question – but only if the legislature ensures a level playing field statewide by enacting a new bill that for 12 years would bar any additional cities, towns and counties from levying additional taxes on food or food containers.

As the New York Times reports, lawmakers were terrified that the ballot question could pass, severely limiting the ability of local governments to keep pace with rising costs.  As a result, SB 872 and its Assembly companion bill, AB 1838 – both of which had mostly lain dormant for months – sped through the legislature this week until today, when it was enacted by the Assembly and Senate and signed by the governor, all in one day.

The American Beverage Association defends its hardball tactics, describing the alternative of fighting sugar taxes in individual cities and towns as a perpetual game of Whac-A-Mole.  Opponents decried the industry for going “rogue” and holding the state hostage.

As enacted, the “Keep Groceries Affordable Act” applies to nearly all food products – however sold or served – including their “packaging, wrapper, or container, or any ingredient thereof.”  As such, it potentially has impacts far beyond the obesity debate, preventing communities, for example, from levying fees on single-use plastic bags.  It is also likely to serve as a precedent for efforts in other states to create greater uniformity and avoid a proliferation of local requirements.