Imagine that someone goes door-to-door in your neighborhood selling fire insurance saying, “With this policy, you will have special protection. Otherwise, I will burn your house down.” You and your neighbors decide that you would rather pay for the policy than have your house burned down.
Faced with a soft drink tax in several California cities, and hoping to prevent other cities from considering it, the soft drink industry decided to go into the protection business. They spent more than $7 million on an initiative that would require a two-thirds vote, instead of a simple majority, on any local tax increase. For all practical purposes, this measure, if passed, would burn down any chance of effectively funding local government.
With the threat of the November initiative looming, the soft drink industry then suggested they would pull the initiative from the ballot if the state legislature immediately passed Senate Bill 872, which prevents local communities from enacting new soft drink taxes. This legislation passed overwhelmingly. So, no new soda or food taxes for the next 12 years in California.
This is not illegal. But that doesn’t mean it’s right.
The soft drink industry is big, with U.S. sales of around $80 billion. It is extremely profitable. When you are making a product that is 89 to 99 percent carbonated water, there is not much material cost. And soft drinks are heavily promoted. Coke alone spends more than $3 billion dollars worldwide in advertising each year.
These ads don’t tell the whole story. According to a Tufts University study, obesity-related diseases linked to sugary beverages will result in 184,000 additional adult deaths worldwide, including more than 25,000 Americans each year. These diseases include diabetes, heart disease, asthma, and more. The U.S. diabetes cost alone was $245 billion last year. While there are many factors that impact these health conditions, it is safe to say the health care cost related to soft drinks is staggering. Certain things go better with Coke, but they may not be what you want.
However, it is encouraging that health education campaigns on the dangers of soft drinks have been working. In 2003, American children on the average took in 426 calories a day from soft drinks. This fell to 313 calories per day in 2014. There have been similar declines for adults. And in cities where there is a soft drink tax, the decline has been even greater. These taxes have also raised considerable amounts for health and youth programs. Berkeley raised $1.5 million last year. Given the relative size of Sacramento County and the city of Berkeley, Sacramento could expect $19 million with a similar tax.
In response to criticism of their actions, the American Beverage Association said, “America’s beverage companies know we must play a role in improving public health, which is why we are taking aggressive actions to help people reduce the sugar and calories they get from beverages.”
It sounds like the low-tar cigarette defense.
Using legal but disgraceful methods, the soft drink industry has won this round. Now we need to figure out how to respond to a foe that is willing to spend billions of dollars in advertising to convince young people to endanger their health by consuming their products. Ideas?