Soda Taxes Harm Business-Government Relationship

Pepsi CEO calls for "real dialogue" on obesity, labeling, more

PURCHASE, N.Y. -- The proposal by some state governments to tax carbonated soft drinks hurts the relationship between business and government, Indra Nooyi, CEO and chairman of Pepsico Inc., told CNBC. "This sort of arbitrary taxation on products is not a formula for long-term success, and it's not a formula to keep business comfortable with the role of government in business," said Nooyi, who took over the helm at the beverage giant four years ago.

Nooyi said there should be a dialogue on the purpose of such taxeswhether they are to tackle obesity or add revenue to government [image-nocss] coffers.

"If it's to address consumer behavior," she told the news outlet, "we have to find out what's driving obesity levels, what's causing people to consume too many calories. We need to address school lunches and [consider] calorie labeling on all the foods that are sold in restaurants and supermarkets."

She added that, "If it's to close the revenue gap in states, we ought to have a real dialogue between business and government as to how we can work together to improve the plight of economies at the national and state levels."

Purchase, N.Y.-based Pepsico produces a number of the top global food brands, including Pepsi, Mountain Dew, Gatorade, Doritos, Fritos, Tropicana, Quaker and other products.

The $60 billion company garners 52% of its revenue from beverage sales and the rest from snacks and foods; 61% of its sales come from the United States and Canada and the remainder from other parts of the world.

Nooyi added that she plans to expand the company by driving the growth of all its 19 brands, instead of focusing on just one. "It the diversification of the portfolio," she told CNBC, "that makes Pepsico such an attractive company."