The bill sponsored by state Sen. Bill Monning failed on a 7-8 vote as his fellow Democratic lawmakers doubted whether a label would change consumer behaviour. It needed 10 votes to pass.
The bill would have required that certain sodas, energy drinks and fruit drinks carry a label reading, "STATE OF CALIFORNIA SAFETY WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay."
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It was developed by public health advocates using cigarette and alcohol warnings as a model.
Representatives of the beverage industry argued that the bill was unfair because it did not apply to other foods and drinks, including lattes and chocolate milk.
Monning says warning labels would be the most efficacious tool for educating people about the dangers of sugary drinks.
"Changing behaviour is the hardest challenge in the world of medicine," Monning told lawmakers before the vote. "But you can't start to even make a commitment to make behaviour change if you don't have the information."
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His bill had support from the California Medical Association, the California Center for Public Health Advocacy and groups devoted to improving the health of minorities. A similar bill introduced in Vermont stalled this year.
Democratic Assemblyman Jimmy Gomez noted that cigarette warning labels were accompanied by taxes and prohibitions on smoking in public places before tobacco use plunged.
"It wasn't necessarily the labels that changed peoples' habits, but it was the other requirements," said Gomez.
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CalBev, the California arm of the American Beverage Association, says it posts calorie counts on the front of many beverage containers as part of a voluntary campaign that started in 2010.
Industry groups also say warning labels may conflict with an upcoming overhaul of the nutritional information labels regulated by the U.S. Food and Drug Administration.
Sugary drinks have been a target of public health advocates who see them as one of the biggest drivers of preventable diseases. Former New York City Mayor Michael Bloomberg pushed a ban on large servings of soft drinks in 2012.
A poster for the 'Sugar Bites' ad campaign aiming to warn consumers about the dangers of too much sugar
Read: Why is sugar getting such a bad rap?
A court later struck down the ban after it prompted lawsuits and an aggressive campaign from businesses. The lower court ruling has been appealed by New York City officials.
Leaders in San Francisco and Berkeley are considering sending measures imposing a sugary drink tax to voters in November after nearby Richmond rejected such a tax in 2012.
A children's health group recently launched a "Sugar Bites" ad campaign (see above) in the east San Francisco Bay Area and state capital depicting sugary drinks as snarling monsters with sharp teeth held by anxious children.
Monning, who previously called for a soda tax, said he would keep pushing for warning labels.
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