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In the Spotlight – US soft drinks tax

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As several US states look to tax regular soft drinks, we take a look at the reaction to the proposals in the industry and media.

From California and New York to Kansas and Colorado, state governments have proposed a "sin tax" on soft drinks that has garnered strong reactions both for and against.

Earlier this year, US campaign group New Yorkers Against Unfair Taxes voiced its disappointment over the proposal by New York Governor Paterson for a US$0.12 tax on 12oz cans of sugar sweetened soft drinks.

“New Yorkers are struggling to make ends meet in this economy and we shouldn't bear the burden of fixing the Governor's budget problems,” said Nelson Eusebio, chairman of New Yorkers Against Unfair Taxes. “Another tax will be detrimental to hardworking New York businesses and residents.”

In Washington state, a full-page ad paid for by Washingtonians Against the Beverage Tax has more recently appeared in newspapers around the state.

“This tax will severely impact our state’s bottling industry by causing massive family-wage job losses and forcing many bottlers out of business,” said Tim Martin, the association’s president and owner of an Elma bottling company.

Publication WNDU.com said that, while the money would ideally help ailing state governments and help reduce obesity rates, studies haven't proven taxes really curb consumption in states that have already taken on the tax.

“The tax could be similar to other taxes like alcohol, cigarette, or tanning tax. Some studies show that only if the tax is really high will consumption rates drop otherwise people will keep buying,” the publication wrote.

George Miranda, writing for Buffalo News, believes the tax - promising to increase revenue and fight obesity at a “mere” penny-per-ounce - is “too good to be true” and won’t affect obesity. Miranda said the tax is nothing more than a “hidden tax on middle-class families that directly puts at risk thousands of good-paying private-sector jobs across New York State”.

“Particularly following last year’s bottle bill, this new tax will leave little incentive for New York’s soft drink industry to remain viable," Miranda said.

“Pass this tax, and we will have once again successfully driven another major blue-collar employer across state lines,” he said.

Tim Martin, head of the Washington Beverage Association, warned the tax may not hurt individual consumers, but it will punish the soft drink business and cause cutbacks and job losses.

"The soft drink market is extremely price sensitive. There is a direct correlation between price and sales. For every 1% the price goes up, volume drops 1%. Sales, which are already down in a poor economy, will fall off a cliff if we try to pass this increase on to our customers," Martin told King 5 News.

But despite the mounting opposition, there are still many in favour of a tax.

Michael Jacobson told AJC.com that, unlike milk or juice, sugar-sweetened beverages provide nothing but empty calories.

“I call soft drinks “liquid candy,” since they provide plenty of calories without necessary nutrients. Besides promoting obesity and disease, soft drinks displace from the diet real foods with valuable health-promoting nutrients.

“While soda lobbyists shed crocodile tears about the effects on poor consumers of a penny-per-ounce tax, the soda industry is gouging Americans for what is, after all, mostly water and high-fructose corn syrup,” Jacobson said.
 
“If Coke and supermarkets can ratchet up their profits like that by several cents an ounce, why shouldn’t legislators take a penny to help undo the damage that liquid candy causes?” he added.

In Tennessee, medical students are garnering support for a soda tax that they believe will fight childhood obesity.

The students want counties to also be able to use the money, if they choose, to create athletic fields, parks and greenways. The increased recreational opportunities, they said, should be part of dealing with the childhood obesity epidemic. No new or added taxes would be created.

According to the journal Archives of Internal Medicine, the obesity epidemic in the US costs the country an estimated US$147bn a year in health costs.

Drs. Mitchell Katz and Rajiv Bhatia, of the San Francisco Department of Public Health, told Natural News that taxes are a way to correct a market that favours unhealthy food choices over healthier options.

"Sadly, we subsidise the wrong things including corn, which makes the corn syrup in sweetened beverages so inexpensive," they wrote.

The campaign group Center for Science in the Public Interest (CSPI) told the same publication that soft drinks are nutritionally worthless and are directly related to weight gain.

Soft drinks producers have consistently denied a direct link between their products and rising obesity rates in the US. Rather than tackling obesity, they argue that the tax is a way to fill holes in state budgets.

Whether the sin tax proves to be the answer to obesity or just a “hodge-podge, nickel and dime” approach remains to be seen. But, now that the idea is out of the box, it looks like we'll be talking about it for some time to come.

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Sectors: Legislation, Soft drinks, Water

Companies: Coke

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