Connecticut restaurant leaders oppose HB 7273 sweetened beverage tax impacting small businesses

The Connecticut Finance Revenue and Bonding Committee held a public hearing on April 14, 2025, where significant concerns were raised regarding House Bill 7273, which proposes a tax on sweetened beverages, syrups, and powders at a rate of 2 cents per ounce. This proposal has sparked strong opposition from various stakeholders, particularly within the restaurant and beverage industries.

Scott Dolch, representing the Connecticut Restaurant Association, voiced deep concerns about the potential impact of the tax on small, independently owned restaurants, which make up 97% of the state's dining establishments. Dolch highlighted that the added costs from the tax could lead to substantial price increases for consumers, with examples showing that a 3-gallon bag of syrup could incur an additional $46.08 in taxes. He emphasized that many restaurants are already struggling with thin profit margins due to inflation and the lingering effects of the pandemic, and this tax could exacerbate their financial challenges, potentially leading to more closures.

Dolch acknowledged the intention behind the tax—to fund a universal preschool meals program—but argued that it unfairly burdens local businesses and consumers. He called for alternative solutions that would support the restaurant industry while still addressing food security for students.

The hearing also featured testimony from representatives of Coca-Cola Beverages Northeast, who echoed Dolch's concerns. Mike DeFeo, the general manager, explained that the tax would not only increase costs for consumers but could also lead to job losses within the beverage distribution sector. He pointed out that Connecticut families already face high costs due to existing taxes, and this new tax would disproportionately affect lower-income residents, pushing them to shop in neighboring states with lower beverage prices.

Justin Wise, a merchandiser for Coca-Cola, added that the proposed tax would likely drive customers away from local businesses, further harming the economy. Moises Castillo, a driver for Coca-Cola, expressed worries about job security, noting that reduced sales could lead to layoffs within the company.

The committee members engaged in discussions about the implications of the tax, with some expressing support for the universal meal initiative while also recognizing the need to protect small businesses from additional financial burdens. The hearing concluded with a consensus that while the goal of providing free meals for students is commendable, the method of funding through a beverage tax may not be the most effective or equitable solution.

As the committee deliberates on this bill, the voices of local businesses and their employees highlight the delicate balance between funding essential programs and ensuring the viability of Connecticut's small business landscape. The outcome of this proposal could have lasting effects on both the restaurant industry and the broader community.