by Marion Nestle

Search results: soft drink tax

Dec 16 2008

More on the NY State soft drink tax

Here’s the proposed statute. The relevant section reads:

“Create Sales Tax on Soft Drinks. Imposes an additional 18 percent rate of sales and compensating use taxes on fruit drinks that contain less than seventy percent of natural fruit juice and non-dietetic soft drinks, sodas and beverages. By increasing the price, it will discourage individuals, especially children and teenagers, from excessive consumption of these beverages. Revenues will be directed for health care initiatives.”

And here’s the American Beverage Association’s predictable response:  hurts the middle class, nobody wants it, no science or logic behind it.  The New York Times refers to what’s happening as a “spirited debate” (I am a participant).

It will be interesting to see how this plays out.  For example, the maker of a carbonated juice drink wrote me to complain that her product, which is 50% juice and taxable, contains under 70 calories per 8-ounces in comparison to non-taxed 100% fruit juice at 110 calories/8 ounces.  Obesity is about calories, no?  Or is it really about the kinds of products people habitually drink?

Dec 15 2008

Tax soft drinks in New York?

Governor Paterson says he can raise $404 million in state revenues with a 15% tax on soft drinks (but not diet sodas, juices, milk, or water).   I’m curious to know what you think of this idea.  Please weigh in.

Jul 2 2018

Big Soda strong-arms California: no more soda taxes for 12 years. Shame!

In 2017, Jennifer Pomeranz and Mark Pertschuck published an article in the American Journal of Public Health titled State Preemption: A Significant and Quiet Threat to Public Health in the United States.

How right they were.

Last week, California Governor Jerry Brown signed a law banning new soda tax initiatives in the state until 2030, thereby preempting local initiatives planned and in progress.

How did this happen?

Raw, overt power politics (my emphasis throughout).  The Sacramento Bee shows how it’s done.

The Hill explains that this bill was a compromise.

The measure was a last-minute compromise to stop an initiative circulated by the beverage industry that would make it more difficult to raise state and local taxes in California.  “Mayors from countless cities have called to voice their alarm and to strongly support the compromise which this bill represents,” Brown wrote in a signing message.

Big Soda’s tactic: use California’s ballot initiative process to put forth a measure requiring a two-thirds majority to pass any new tax legislation.  Brown and those mayors must have assumed it would pass (anything to prevent new taxes).  Brown said he would agree to a 12-year moratorium on new soda taxes if the soda industry would withdraw the measure.  It did, and he signed.

In explaining the so-called “compromise” (in quotes because this was blackmail), US News quotes state senator Scott Wiener (Dem-San Francisco):

This industry is aiming a nuclear weapon at government in California and saying, ‘If you don’t do what we want we are going to pull the trigger and you are not going to be able to fund basic government services.”

In other words, the beverage industry held the state hostage. Like the Sacramento Bee, I’d call this a shakedown.

The Sacramento Bee also called it extortion—a power play by the American Beverage Association that:

appears to be working as intended. As the deadline for signing the state budget approaches this week, a developing trailer bill attached to it would give Big Soda a 12-year ban on local soda taxes in exchange for dropping a ballot initiative that would threaten the finances of cities throughout California. Who says extortion doesn’t pay?

The New York Times explains the “stunning” preemption:

Now the beverage industry has a new approach. Instead of fighting the ordinances city by city, it is turning to states, trying to pass laws preventing any local governments from taxing their products.

The reactions have been fierce.

Nancy Brown, CEO of the American Heart Association says, “We’ve seen some cynical moves to protect profits, but this soda tax ban is a new low.”   The American Heart Association issued a statement:

The bill—a last-minute, backroom deal negotiated and written in secret by beverage industry lobbyists and their allies—is a significant step backwards in the ongoing effort to reduce overconsumption of sugary drinks.

“This is one of the worst pieces of legislation I have seen in more than 30 years spent fighting for better health for kids and families,” said Nancy Brown, CEO of the American Heart Association. “We could not be more disappointed to see this bill, taken straight from the tobacco industry playbook, pass.”

The LA Times said “Shame on California lawmakers for caving in to the soda industry.”

Salon explains:

There’s a lot at stake for America’s biggest soda companies. Carbonated soft drinks – such as Coke, Fanta, Sprite, and Fresca – make up two-thirds of Coca-Cola’s production, and U.S. soda sales earned the company more than $10 billion in 2015. And PepsiCo’s soda sales – including Pepsi, 7Up, and Mountain Dew – still account for one-quarter of the company’s $38 billion in North American sales, despite a shift toward healthier products. But soda consumption fell to its lowest point in 31 years in the U.S. in 2016, according to Fortune, and Coca-Cola concedes that sweetened beverage taxes “are hurting Coke’s business.”

I’ll end with this quote from the New York Times:

Bill Monning, the Senate majority leader, was one of a handful of Democrats who voted against the bill. He called its passage “unprecedented” and said it would stop cities and counties “from being able to take steps to protect the health of their residents”…“It’s a sad day for democracy in California,” he said. “But ever the optimist I think that the outrage of Big Soda blackmailing the state legislature and the people of California is going to boomerang.”

Let’s make sure that happens.

And while we are at it, don’t let this happen in your state.  If the soda industry threatens to mess with state elections, tell your representatives and governor to resist.  California public health advocates: keep the pressure on.  Advocate for bans on sodas everywhere you can: schools, hospitals, workplaces, government offices.  Expose what the industry is doing to protect its profits at the expense of public health.  Don’t give up.  Courage!

For the record, here’s where to find out more about this shameful episode.

Dec 14 2016

The pros and cons of taxing foods based on their sugar content

The Urban Institute has just published The Pros and Cons of Taxing Sweetened Beverages Based on Sugar Content.

The report is funded by the American Heart Association and others.  The AHA issued a press release.

The sections of the report state its conclusions:

  • Taxing Sugar Content Is the Least Costly Way to Reduce Sugar Consumption
  • Taxing Based on Sugar Content Is Feasible at the National Level
  • Taxing Based on Sugar Content Raises More Issues at the State and Local Level but Is Generally Feasible As Well

The report concludes:

We conclude that taxing based on the amount of added sugar a drink contains, either by taxing sugar content directly or by levying higher volume taxes on drinks with more sugar, is feasible in many jurisdictions and reduces sugar consumption more effectively than comparable taxes on drink volume.

Broad-based volume or sales taxes on all soft drinks, however, raise revenue more efficiently.

Federal, state, and local policymakers thus face trade-offs between using sweetened-beverage taxes to raise revenue and to discourage consumption of added sugars.

Keep this in mind when trying to do this in your community.

Mar 21 2016

The UK soda tax: a tipping point?

Wonder of wonders, the UK’s Chancellor of the Exchequer, George Osborne, has put a soda tax into his new budget initiative (see BBC account, the video and text of Osborne’s speech, and the Treasury department’s fact sheet on the soda tax).

Here’s how the tax is supposed to work:

Shocking: Many of Britain's most sugary drinks contain more that the daily recommended amount for one person

Osborne says the tax will bring in £520 million ($732 million) in the first year, and he intends to use it to fund more sports in schools.

But it goes into effect in April 2018.  This is to give the industry time to reformulate products with less sugar.  But—the delay also gives the industry ample time to block the tax.

Public Health England supports the tax (see statement).

But the soda industry wasted no time reacting to this bad news.

  • Coke, Pepsi, and other soft drink companies strongly objected.
  • The immediate result: a fall in their stock prices.
  • The immediate reaction: Sue the government.  On what grounds?  Discrimination.  The tax does not affect sugary juices, milkshakes, or processed foods.

New tax: Soft drinks with more than 5g of sugar will be taxed at 6p per can or carton and drinks with more than 8g of sugar will be taxed at 8pm, which if passed on to the consumer means a can of Old Jamaica ginger beer will go up from 58p to 66p

The makers of artificial and alternative sweeteners think this will be a win for them.

Will the tax help reduce obesity?  On its own, that would be asking a lot.

Jamie Oliver, the British chef who favors the tax, says of course it won’t work on its own.  It needs to be accompanied by six additional actions (food labels, better school food, curbs on marketing to kids, etc.).

Why are soda companies so worried about this?  It could be catching.

Will the UK tax stick?  Watch Big Soda pull out every stop on this one.

And think about what they are doing to fight soda taxes when you read or hear that soda companies want to be part of the solution to obesity.

Oct 6 2013

Soda tax controversy goes international

My monthly first Sunday Food Matters column in the San Francisco Chronicle:

Q: I hear that the Mexican government wants to increase taxes on sodas as a way to fight diabetes. The soda industry persuaded voters to defeat soda taxes in Richmond and El Monte last year. Won’t it do the same in Mexico?

A: It might. I’m just back from a lecture trip to Mexico City where I heard plenty about the proposed soda tax and the industry’s response to it.

Last month, the Mexican government proposed an additional soda tax of one peso (about 8 cents) per liter. The idea is to raise $1.5 million per year while discouraging soda consumption, thereby helping to reduce the country’s high prevalence of obesity and Type 2 diabetes.

Mexicans drink lots of soda. By some estimates, average per capita consumption is 50 gallons a year, the highest in the world. It’s no coincidence that more than 70 percent of Mexicans are overweight or obese, and around 15 percent have Type 2 diabetes, a prevalence that terrifies health officials. This type of diabetes, if undiagnosed and untreated, can lead to blindness or foot amputations.

‘Nutrition transition’

Mexico is a classic example of a country in “nutrition transition.” As the economy improves, people increasingly buy high-calorie ready-made foods, put on weight, and raise their risk for diabetes. Meanwhile, the poorer segments of the population continue to experience high levels of stunting, iron-deficiency anemia and vitamin A deficiency.

This makes obesity a relatively new problem in Mexico, one widely understood to result from the introduction of processed foods – especially sodas – into the Mexican food market.

I could easily see how deeply sodas are embedded in Mexico’s food culture. Sodas were advertised and available everywhere. And they come in enormous three-liter bottles that cost less than the price of bottled water – only 17 pesos ($1.35) each. Clean water is not always available, making sodas the easy choice.

Sodas are cheap because Mexico grows its own sugarcane and sells it at market prices. We, however, artificially support the higher price of U.S. sugar through tariffs and quotas. That’s why our sodas are made with high fructose corn syrup. We subsidize corn production so corn syprup costs less than sugar.

Some people think cane sugar tastes better than high fructose corn syrup, although controlled taste tests don’t always back this up. It’s ironic that U.S. supermarkets now carry, at highly inflated prices, Mexican Coca-Cola sweetened with cane sugar.

Industry efforts to defeat the Mexican soda tax have been ferocious, just as they were in Richmond and El Monte last year. Producers argue that if the tax really does decrease consumption, it will cause hundreds of thousands of jobs to be lost.

I saw a newspaper advertisement from the Mexican Beverage Association that not only attacked the science relating soft drinks to obesity, but extolled the health benefits of sodas: “Sugar is nutritious; it’s a carbohydrate. Carbohydrates are essential for life. Sugar is indispensable for the brain. Soft drinks hydrate and bring energy.”

An ad from the sugarcane industry also threatened job losses – “The tax will generate unemployment and discourage productivity and investment” – and noted that workers and the poor will bear most of its burden.

The big questions

As with any such initiative, the big questions are whether the tax is likely to reduce soda consumption, obesity and diabetes, and whether the revenue will be used for widely beneficial public health purposes. Mexico’s Congress will have to address these questions when it votes on the tax in the weeks ahead.

In the meantime, a coalition of consumer and health groups, in part funded by Bloomberg Philanthropies, has been putting posters in subway stations that illustrate the amounts of sugar in soft drinks. The groups are actively advocating for the soda tax and for using its funds to provide free potable water in schools – something that does not now exist. But TV stations have refused to carry their ads for fear of losing soda advertisers.

Like their U.S. colleagues, Mexican public health authorities are searching for effective ways to reverse obesity trends. Sugary drinks are an easy target. Taxing them might happen despite industry opposition – especially if the funds are earmarked for clean water.

Editor’s notesMarion Nestle will discuss her new book, “Eat, Drink, Vote: An Illustrated Guide to Food Politics,” with Narsai David at the Commonwealth Club on Oct. 15 at 6 p.m., and at Book Passage in Corte Madera on Oct. 19 at 11 a.m.

She is also receiving the James Beard Foundation Leadership Award for her writing about how science and public policy influence what we eat. The award ceremonies are Oct. 21 at the Hearst Tower in New York.

Marion Nestle is the author of “Eat, Drink, Vote,” “Why Calories Count: From Science to Politics,” “Food Politics” and “What to Eat,” among other books. She is a professor in the nutrition, food studies and public health department at New York University, and blogs at www.foodpolitics.com. E-mail: food@sfchronicle.com

Nov 28 2012

The Danish fat tax: reflections on its demise.

My latest publication is a commentary on the reversal of the Danish fat tax in New Scientist, November 26:

Fighting the flab means fighting makers of fatty foods

A YEAR ago in these pages, I congratulated the Danish government on its revolutionary experiment. It had just implemented a world-first fiscal and public health measure – a tax on food products containing more than 2.3 per cent saturated fat.

This experiment has now been dropped. Under intense pressure from the food industry in an already weak economy, the Danish government has repealed the fat tax and abandoned an impending tax on sugars.

Nobody likes taxes, and the fat tax was especially unpopular among Danish consumers, who resented having to pay more for butter, dairy products and meats – foods naturally high in fat.

But the real reason for the repeal was to appease business interests. The ministry of taxation’s rationale was that the levy on fatty foods raised the costs of doing business, put Danish jobs at risk and drove customers to buy food in Sweden and Germany.

In June this year, a coalition of Danish food businesses organised a national repeal-the-tax campaign. The coalition said that fat and sugar taxes would cause the loss of 1300 jobs, generate high administrative costs and increase cross-border shopping – precisely the arguments cited by the government for its U-turn.

We can now ask the obvious questions. Did the tax achieve its aims? Was it good public policy? What should governments be doing to reduce dietary risk factors for obesity?

The purpose of food taxes is to reduce sales of the products concerned. In bringing in its fat tax, the Danish government also wanted to raise revenue, reduce costs associated with obesity-related diseases, and increase health and longevity. A year is hardly time to assess the impact on health, but the tax did bring in $216 million. Danes will now face higher income taxes to make up for the loss of the fat tax.

Business groups insist that the tax had no effect on the amount of fat that Danes ate, although they chose cheaper foods. In contrast, economists at the University of Copenhagen say Danish fat consumption fell by 10 to 20 per cent in the first three months after the tax went into effect. But it is not possible to know whether it fell, and cross-border shopping rose, because of the tax or because of the slump that hit the Danish economy.

A recent analysis in the BMJ suggests that 20 per cent is the minimum tax rate on food to produce a measurable improvement in public health. The price of Danish foods hit by the tax increased by up to 9 per cent, enough to cause a political firestorm but not to make much of a difference to health.

Is a saturated-fat tax good public policy? A tax on sugary drinks would be a better idea. To see why, recall that obesity is the result of an excess intake of calories over what we burn. Surplus calories, whether from carbohydrate, protein or fat, are stored as body fat. All food fats are a mix of unsaturated and saturated fatty acids; all provide the same number of calories per unit weight.

Saturated fats raise the risk of coronary heart disease, although not by much. Trans fats, banned in Denmark since 2003, are a greater risk factor. Because the different saturated fatty acids vary in their risk, imposing a single tax on them as if they are indistinguishable is difficult to support scientifically.

For these reasons, anti-obesity tax measures in other countries have tended to avoid targeting broad nutrient groups. Instead, they focus on processed foods, fast food or sugary drinks – all major sources of calories. Taxing them seems like a more promising strategy.

What else should governments be doing? That they have a role in addressing the health problems caused by obesity is beyond debate, not least because they bear much of the cost of dealing with such problems. In the US, economists estimate the cost of obesity-related healthcare and lost productivity at between $147 billion and $190 billion a year. The need to act is urgent. But how?

One lesson from Denmark is that small countries with open borders cannot raise the prices of food or anything else unless neighbouring countries also do so. But the greater lesson is that any attempt to encourage people to eat less will encounter fierce food-industry opposition. Eating less is bad for business.

In the US, state and city efforts to tax sugary drinks have met with overwhelming opposition from soft-drink companies. They have successfully spent tens of millions of dollars lobbying legislators and convincing the public that such measures deprive voters of their “right to choose” or, as in Denmark, can damage the economy.

What’s more, the poor cannot be expected to support measures that increase food costs, even though obesity-related problems are much more common among low-income groups.

If governments really want to reduce the costs of obesity-related chronic diseases, they will have to address the problem at its source: the production and marketing of unhealthy food products.

A review by the American Heart Association cites increasing evidence for the benefits of anti-obesity interventions: food taxes, subsidising healthy foods, media campaigns to promote exercise and good diet, restrictions on portion sizes, and restrictions on the marketing of unhealthy foods and their sale in schools.

Governments must decide whether they want to bear the political consequences of putting health before business interests. The Danish government cast a clear vote for business.

At some point, governments will need to find ways to make food firms responsible for the health problems their products cause. When they do, we are likely to see immediate improvements in food quality and health. Let’s hope this happens soon.

Marion Nestle is the author of Food Politics and What to Eat and is the Paulette Goddard professor of nutrition, food studies, and public health at New York University

Jul 2 2012

Soda taxes and other measures designed to fight obesity

My once-a-month (first Sunday) Q and A column in the San Francisco Chronicle deals with recent city initiatives.

Q:Why do municipalities continue to try to tell us what to eat or drink through taxes (the 1-cent soda tax on the Richmond ballot in November) or outright bans (eliminating super-size soft drinks, proposed by Mayor Michael Bloomberg in New York)?  Richmond residents could just buy their sodas in neighboring towns, and 1 cent seems hardly enough to influence anyone. New Yorkers could just buy two drinks if they want more. Isn’t this all rather silly?

A: Silly? On the contrary. These are dead-serious attempts to address the health problems caused by obesity through “environmental” change – changing the context in which we make food choices.

By now, health officials are well aware that asking individuals to take responsibility for making their own healthy food choices hasn’t got a prayer of success in the face of a marketing environment that encourages people to eat everywhere, all day long, in very large portions and at relatively low cost.

This is the default food environment, where it’s useless to tell people they need to eat less and expect them to do it. They can’t. Instead, it makes sense to try to change the food environment to make healthy choices the easy choices.

Healthy by design?

Suppose, for example, that all kids’ meals at fast-food restaurants were healthy by design and automatically provided milk or water.

You could still order a soda for your kid, but you would have to ask for it – and pay extra. If you are like most people, you won’t bother. That’s why the default matters.

Cities are trying to change the default. One change may or may not make a difference – we don’t know that yet. But changing the default might well make healthy choices easier in schools, fast-food restaurants and other institutions.

Bloomberg’s proposal in New York, to ban sodas larger than 16 ounces, is one such step. From my standpoint, 16 ounces is generous. It’s two full servings and provides about 50 grams of sugars, 200 calories and 10 percent of daily calories for someone who consumes 2,000 calories a day.

Portion sizes used to be a lot smaller. Decades ago, Coca-Cola advertised 16-ounce bottles as “big” and enough to serve three over ice.

If we could recognize that larger portions have more calories – and act on this knowledge – we might have an easier time maintaining weight. But we can’t, at least not easily.

The Richmond soda tax proposal recognizes that more than half of Richmond schoolchildren are overweight or obese. This percentage is higher than in other areas of Contra Costa County.

Even more striking, city officials estimate that two-thirds of Richmond adolescents consume more than 400 calories a day from soft drinks.

Kids who habitually drink sugary sodas tend to have worse diets, to be fatter and to display more risk factors for chronic diseases than kids who don’t.

This makes sugar-sweetened beverages an obvious target for environmental approaches to obesity prevention. Sugary sodas have calories but no nutrients. They are consumed in large amounts. They are highly correlated with obesity and health risks. They are “liquid candy.”

Sugary drinks should be once-in-a-while treats, not daily fare.

Richmond officials hope that the tax will encourage healthier choices. They deliberately set the proposed tax small so it would not unduly burden low-income residents.

One penny per ounce – 16 cents on a 16-ounce soda – may not be enough to change behavior, but it sends a clear message: It’s less expensive to drink water, and it’s healthier to reduce soda intake.

Funding programs

The Richmond proposal has one other critically important feature. It specifies that soda tax revenue will be used to fund city programs to address and reduce childhood obesity, especially in low-income areas where obesity rates are high.

These experiments are worth national attention. They may well do some good for individuals, and I can’t see how they would cause harm in any way except, perhaps, to the economic interests of soda companies.

Soda companies are taking these initiatives seriously. They are pouring millions of dollars into lobbying and community campaigns against both proposals.

Both have elicited plenty of public discussion, much of it focused on the rights of individuals versus the public health interests of government.

What I like about these initiatives is that they do not infringe on individual rights – people can buy as much soda as they want. The proposals simply try to make the default food environment slightly more conducive to healthy choices.

I’m hoping both proposals go forward. I can’t wait to see how they play out.