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Boulder’s sugary drink tax will hurt small business aimed to improve health

BOULDER, Colo. -- A ballot issue passed in Boulder that is aimed to prevent health issues such as diabetes is actually hurting some businesses focused on helping prevent those health problems.

Boulder voters approved ballot issue 2H, which will install a tax on distributors of sugary beverages.

Local producers of kombucha and water kefir, considered to be healthy alternatives to soda, are subject to the excise tax.

Doctor D’s is a small business that produces water kefir and says it can have a positive impact on a person’s health.

“By consuming drinks like ours, you’re actually helping fight off things like Type 2 diabetes,” founder Stuart Dimson said.

Kombucha and water kefir are considered probiotic beverages that are naturally fermented with a living colony of bacteria and yeast. And they both need sugar to maintain balance.

“We have to leave sugar in the drink to keep the bacteria alive,” Dimson said. “That would be considered a probiotic and it’s good for you.”

Ballot issue 2H slaps an excise tax for any 12-ounce drink with more than 4 grams of sugar. The tax is 2 cents per ounce of the beverage.

For example, Doctor D’s has 9 grams of sugar per 12 ounces, while an average soda brand has about 40 grams per 12 ounces.

“I don’t think they realized they were hurting us by voting for this,” Dimson said. “I think the intention here to try and do something about this epidemic of diabetes. There’s something to that. But I think it misses the boat.”

For a small business such as Doctor D’s, that excise tax means one bottle will cost $1 more.

“I’ll grab a Doctor D’s for $2.99. That’s reasonable. But at $3.99 or maybe more, that’s too much,” Dimson said. “Our sales would drop off. Now you’re pushing people to drinks that are less healthy because they are cheaper.”

Dimson agrees ballot issue 2H is trying to send the right message, but it might have the wrong wording.

“Unfortunately, I think the intention for a lot of people was to try and combat what they see as this big soda, big corporation ruining our health, but they threw us in with that,” Dimson said. “It wasn’t written properly. We’re part of the solution, not part of the problem.”