Soda tax war on obesity

18 September 2009

WALTHAM, MASS: Carbonated or sweetened drinks such as Coca-Cola and Sunny Delight could face a "soda tax" aimed at averting the obesity crisis and reducing healthcare costs in the US.

The scheme, which is being proposed in the influential New England Journal of Medicine, calls for an excise tax of a penny per ounce on caloric soft drinks and could potentially add 20% to the average retail cost.

The NEJM article argues that the “science base linking the consumption of sugar-sweetened beverages to the risk of chronic diseases is clear...escalating health-care costs, and the rising burden of diseases related to poor diet...justify government's right to recoup costs."

Kelly Brownell, a professor at Yale University and lead author of the paper, adds that beverage companies "have spent decades convincing people it's glamorous, sexy and athletic to be drinking sugared beverages, and it's time for some of that damage to be undone."

Coca-Cola chairman and chief executive MuhtarKenthas called the proposed tax "outrageous," saying it reminds him of his days as a Coke executive in the former Soviet Union.

"I have never seen it work where a government tells people what to eat and what to drink," he said. "If it worked, the Soviet Union would still be around."

Currently, 33 states have sales taxes on soft drinks, but the taxes are too low to affect consumption and the revenues are not earmarked for health programs, according to the NEJM.

In a recent interview with Men's Health magazine, PresidentBarack Obama said a soda tax is "an idea that we should be exploring," but so far, he hasn't gone further.

Gordon Brown vetoed a plan for a similar tax – this time on burgers and sweets - back in 2004, saying it would disproportionately affect consumers on lower incomes.

Data sourced from Wall Street Journal; additional content by WARC staff