The taste of soda may be sweet, but the potential consequences
of those empty calories -- obesity, diabetes, higher mortality and skyrocketing
health care costs -- are not. In response, many states and cities in recent
years have proposed taxes or other initiatives intended to reduce consumption of
sodas and other sweetened drinks.
One
proposal commanding a lot of attention is New York Mayor Michael Bloomberg's
proposed "soda ban," which would prohibit the sale of sweetened beverages
greater than 16 ounces -- including sodas, sports drinks and sweetened coffees
and teas -- in restaurants, food carts, delis and concession stands at movie
theaters, stadiums and arenas. The "ban," which
is scheduled to be voted on by New York's board of health this week, would
not apply to soda sold in supermarkets or convenience stores.
"There is a huge likelihood that the 'soda ban' will be the next McLean" -- a
healthier burger option added to the McDonald's menu in 1991 that failed to
catch on with customers, says Brian Wansink, a Cornell marketing professor and
director of the school's Food and Brand Lab. "For 10 years after [that product
was introduced], fast food companies were hesitant to come out with new
[health-conscious] products because they didn't want to be the next McLean."
The soda ban is a similar gamble, he notes, because "it's visible, it's
controversial and if it doesn't overwhelmingly succeed, people will look at all
subsequent public health efforts with tremendous disdain and distrust." And the
odds are not stacked in favor of the ban, or a growing number of efforts in
other cities to tax sugary beverages, Wansink adds. As evidence, he cites 150
years of economic research that shows "if people really want something, they are
going to find a way to buy what they want."
Some experts argue that bans or taxes could give consumers pause -- either
due to a raised consciousness about the health risks associated with too much
soda, or, in the case of a tax, because the drinks will become more expensive.
But others worry that such methods of curbing obesity will have a number of
unintended consequences -- even hurting low-income Americans, many of whom
already suffer from a lack of affordable food options.
"It's a Catch-22," says University of Pennsylvania nursing and epidemiology
professor Karen
Glanz. "The [food] industry, in this case, is selling legal products
that we can't say are 'all bad,' as we could say about tobacco.... If [health
advocates] don't team up with the food industry," and instead continue to just
push back at it, "[the industry] will become more committed to undermining
health initiatives."
Unlike the soda ban, levying taxes on sugary drinks serves a second purpose
-- combating many cities' budgetary woes. "The good news is that in some ways,
sweetened-beverage taxes can help" to mitigate health and budget problems, notes
Wharton health care management professor Mark Pauly.
But the effect will be limited. The taxes "won't raise all the money that cities
need nor make a major dent in the obesity problem."
Sharing the Pain
Currently, 30 states levy a sales tax, averaging about 5%, on soda purchases.
In Richmond, Calif., city officials are taking a different approach: Included on
the ballot in November will be a proposed penny-per-ounce excise tax on
sugar-sweetened drinks sold, served or otherwise provided by stores, restaurants
and other businesses. The proposal is structured as a business license fee,
meaning it would be up to merchants to decide how, or if, they would pass the
tax on to consumers. If voters approve it, the initiative would be the first of
its kind in the U.S., according to The
Wall Street Journal. Other cities may follow Richmond's lead: Most
recently, the city of El Monte, Calif., has also placed a soda tax measure on
its November ballot.
Opponents of the bills in Richmond and El Monte, led by the American Beverage
Association (ABA), have argued that the legislation would hurt low-income
residents and local businesses, while unfairly targeting only one in a sea of
unhealthy products that are for sale on the nation's grocery and convenience
store shelves. According
to Reuters, critics have also noted that while obesity rates in the U.S. are
going up, overall consumption of full-calorie soda has declined.
According to Kelly D. Brownell, director of the Rudd Center for Food Policy
& Obesity at Yale University, an excise tax would conceivably affect the
sticker price of sugary beverages, which could make it more effective than a
sales tax at reducing consumption. "With a sales tax, you don't get to see the
added cost until you get to the cash register," says Brownell, who, in
a 1994 op-ed in The New York Times, was one of the first to bring the
idea of a tax on unhealthy foods into a public forum. However, Glanz notes
that "whether the tax actually achieves a reduction in sugary soda
purchases may depend on how it is implemented." Facing pressure from the
beverage industry, retailers may purposely undermine the taxes -- for example,
by passing them on through increased prices for vegetables or other staples
while keeping the price of sugary drinks low. "I don't think the laws would
[include] any accountability to the public or government as to how they recover
the 'back-end tax,'" she says.
The American Beverage Association has spent millions to fight soda taxes
proposed across the country. In Richmond -- which, along with El Monte, has one
of California's higher rates of obesity in children -- the ABA has funded
billboards criticizing the bill and pledged to spend more to fight its passage,
Reuters reported. The group is backing a lawsuit in El Monte that challenges the
language of that city's proposed soda tax.
But big beverage companies -- many of them multinational firms with diverse
product lines -- may have less to fear from taxes or bans on soda than their
efforts to fight them might indicate, according to Wharton finance professor Robert Inman. "If I'm
Pepsi, and if you start taxing soda, I will produce non-sugary drinks like
water," Inman states. "How many [net] jobs were lost because of cigarettes?
Phillip Morris bought Frito-Lay and sold cigarettes in Africa."
Making a Difference -- But at What Cost?
Too many sugary drinks are just one factor contributing to the nation's
obesity problem, but Brownell says that the beverages are an obvious target for
people trying to mitigate the problem through legislation. "One, it's the
single-greatest source of added sugar in the American diet. Two, it offers no
nutritional value.... Three, there is rock-solid proof linking consumption of
these beverages to obesity and diabetes. Four, the body doesn't recognize
calories when they are delivered in liquids. We don't feel full."
He predicts that the impact of a soda ban or tax would be similar to what
happened with laws aiming to decrease tobacco use. "Youth were particularly
affected by tobacco taxes because they had less money than adults did. That's a
public health bonus, because if you discourage people from bad habits when they
are young, you can prevent a lifetime of bad habits."
For other experts, however, the potential benefits of such laws are less
clear. The calories contained in a large soda alone "don't explain the growth in
obesity," according to Jay Bhattacharya, a professor of medicine at Stanford
University. Quoting statistics from the USDA (United States Department of
Agriculture), Bhattacharya notes that "people eat about 500 more calories [a
day] than they did 30 years ago. In 1975, we ate an average of 2,250 calories a
day per person, and in 2000 we ate an average of 2,750 calories per person per
day." By raising the price of food, he adds, "we reduce what people consume. The
problem is there are other high-calorie, empty-nutrition foods [besides soda].
Focusing on one item is unlikely to address the obesity problem."
Laws that spur people to drink less soda could also prompt them to replace
one bad habit with another. "What if you buy tea and put sugar in it?" Pauly
asks. "What if you make a milkshake with two non-taxed items? [Then] what do you
tax? People will always try to find substitutes."
The proposals on the table in New York, California and elsewhere merely try
to curb the consumption of one type of food, but they don't necessarily steer
consumers toward a healthier choice, notes David Asch,
a Wharton health care management professor and executive director of the Leonard
Davis Institute of Health Economics. "[Everyone] can agree that the correct
amount of cigarettes is [none.] But even though we have an obesity epidemic, the
correct answer is not for everyone to stop eating," he states. "For that reason,
people have different views about full-calorie soda than they do about
tobacco."
Everybody's Problem?
Many opponents fear that laws that try to govern what people eat and drink
will lead to a "nanny state" in which consumers are not permitted to exercise
their own free will. "The conservative argument is: If people want to develop
damaging lifestyles, let them adopt them," Inman says. "My reply is: [Because
of] the cost of obesity, you are raising [health insurance premiums for
everyone.] It's plausible that you have a right to free choice, as long as it
doesn't affect other people. But it does."
Echoing Inman, Glanz notes, "We have all kinds of laws that discourage people
from doing various things [that are bad for them], yet people get up in arms
about [taxes on] food. They don't remember that we already have a lot of
government interference in what we eat," such as laws governing food and
restaurant safety.
But Bhattacharya says that arguments in favor of a tax overlook any long-term
consequences. "We don't want to impose taxes on people who are food insecure,"
he says. "It's a regressive policy that tends to fall hardest on the poor....
It's not necessarily wrong; we just have to think about its effects."