The Kraft/CSP Daily News poll last Friday asked, "Do you think packaged beverage sales in your store would be hurt by a federal soda tax?" Of the nearly 150 respondents, nearly 70% definitely said yes (about 31% said "extremely," more than 26% said "somewhat" and more than 12% said "a little"). And about 20% said "an initial drop, but sales would come back." Conversely, nearly 11% said "no."
A team of doctors, scientists and policy makers has come out saying it could be a powerful weapon in efforts to reduce obesity, in the same way that cigarette taxes have helped curb smoking. The group, which includes the New York City health commissioner, Thomas Farley, and Joseph W. Thompson, Arkansas surgeon general, estimates that a tax of a penny an ounce on sugary beverages would raise $14.9 billion in its first year, which could be spent on health care initiatives. The tax would apply to soft drinks, energy drinks, sports beverages and many juices and iced teasbut not sugar-free diet drinks.
The group's review of research on the topic, appearing in The New England Journal of Medicine, was released on Wednesday. It found that a beverage tax might not only raise revenue but have significant health effects, lowering consumption of soda and other sweet drinks enough to lead to a small weight loss and reduced health risks among many Americans.
The study cited research on price elasticity for soft drinks that has shown that for every 10% rise in price, consumption declines 8% to 10%.
John Sicher, the publisher of Beverage Digest, told the newspaper that a two-liter bottle of soda sells for about $1.35. At 67.6 ounces, if the full tax was passed on to consumers, that would add 50% to the price. A 12-can case, which sells today for about $3.20, could rise by $1.44, a 45% increase.
"A one-cent-per-ounce tax would create serious problems and potentially adversely impact sales for the American beverage industry," Sicher added.
The proposed tax faces a formidable hurdle in Congress, where several members have voiced strong opposition and few if any have said more than that they would be willing to consider it, said the report.
And even a supporter of a beverage tax said it was not clear if it would have a direct effect on the waistlines of Americans. "I think we should be satisfied that soda taxes would be having a modest effect on consumption but would generate billions of dollars that could be used to mount public health campaigns," Michael Jacobson, executive director of the Center for Science in the Public Interest, an advocacy group that favors such a tax, told the paper.
He said that if the tax was levied on the manufacturers of the sugary drinks they might be able to spread the cost among many of their products, from chips to granola bars to diet sodas, which would keep sugary drink users from feeling the full impact.
Nonetheless, discussion of the tax has the beverage industry on the defensive, according to the Times.
Muhtar Kent, the chief executive of Coca-Cola, was asked about the tax on Monday during an appearance at the Rotary Club of Atlanta and he responded by calling it "outrageous." He added, "I have never seen it work where a government tells people what to eat and what to drink. If it worked, the Soviet Union would still be around."
The industry began to coordinate its response in June when it created an organization called Americans Against Food Taxes. It bought a full-page ad last Sunday in The Washington Post, fashioned as an open letter to Congress, saying "Don't tax our groceries." It has also been running commercials on cable networks, including CNN, MSNBC and Fox News.
Kevin W. Keane, senior vice president for public affairs at the American Beverage Association, took exception to any efforts to single out sugary drinks in the fight against obesity. "When it comes to losing weight, all calories count, regardless of the food source," he told the paper. "The bottom line is that the tax isn't going to make anybody healthier. It's not going to make a dent in a problem as complex and serious as obesity, and we're certainly not going to solve the complexities of the health care system with a tax on soda pop."
Meanwhile, President Obama has voiced a cautious openness to the tax. "I actually think it's an idea that we should be exploring," he said in a recent interview in Men's Health magazine. But he acknowledged that there would be significant resistance to such a tax.
Kelly D. Brownell, the lead author of the study and director of the Rudd Center for Food Policy 7 Obesity at Yale, told the Times that a penny-an-ounce tax would have an immediate and powerful impact on the nation's elevated obesity rate. He said that a tax was justified in part because conditions like obesity and diabetes are often treated with public funds through programs like Medicaid and Medicare. Revenue from the tax could help pay for such care. Acknowledging how difficult it would be to get a tax through Congress, he said state or local governments could take the first step.
U.S. Representative Bill Pascrell Jr. (D-N.J.) supports a soda tax. He told the paper that House lawmakers had considered including it as part of their health reform bill, but decided it was too divisive. "It didn't look like we had the votes," he said.
Separately, calling soda the new tobacco, San Francisco Mayor Gavin Newsom will introduce legislation this fall that would charge a fee to retailers that sell sugary beverages, reported The San Francisco Chronicle.
Newsom would need voter approval to tax individual cans of soda and sugary juice, but only needs approval from the Board of Supervisors to levy a fee on retailers.
San Francisco would be the first city in the country to levy a fee on soda if, as expected, it is approved by the board, said the report. A handful of states, including Arkansas and Missouri, tax sodas, and California has considered the idea in the past.
In San Francisco, a soda tax would be just the most recent example of a long line of legislation intended to improve residents' healtha pattern some residents have complained smacks of a "nanny state," the report said. In recent years, city officials have banned the sale of cigarettes in pharmacies, added a fee to packs of cigarettes, required chain restaurants to display calories and fat content on menus and created a program to recognize restaurants that don't serve trans fats.
Jim Lazarus, vice president of the San Francisco Chamber of Commerce, said the group opposes the soda tax. "Does this mean there's a fee on candy bars, on ice cream, on potato chips?" he asked. "Where do you draw the line?"
He added that a small fee, likely to be passed on from the retailer to the consumer, would not be enough to dramatically change people's habits, leading him to believe it is meant to be just another revenue source for the city, he told the paper.
Mitch Katz, director of the city's Department of Public Health, said a study conducted over the past nine months shows a clear link between soda consumption and an increased burden on the public health system. He said he considers a soda fee an incremental step, and that other sugary foods could someday have a surcharge as well.
"It makes sense for the government to help people to make the right choices, and it makes sense to use dollars from charges on sweetened beverages on health programs," he told the Chronicle.
Click herefor previousCSP Daily News coverage of the issue.
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