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Taxing Sugary Drinks Roberta R. Friedman, ScM Yale University
Taxing Sugary Drinks
Roberta R. Friedman, ScMYale University
Today
Conceptual scheme Why tax SSBs? Industry response Will the US pass a tax?
www.YaleRuddCenter.org
PUBLIC POLICY ECONOMICSFOOD MARKETING
WEIGHT STIGMA SCHOOLSLEGAL
COMMUNICATIONS
DIRECTORKELLY BROWNELL
The Rudd Center
Dep. DIRECTORMarlene Schwartz
AJPH, 2000
AJPH, 2010
Prev. Medicine, 2011
Rudd Papers: Taxes
Brownell, Frieden. Public policy case for taxes. NEJM, 2009
Brownell et al. Public health and economic benefits of taxing SSBs. NEJM, 2009
Rudd Papers: SSBs
SSBs and health– Effects of soft drink consumption on
nutrition and health (AJPH, ‘07)
Other– Perils of ignoring history: Big tobacco
played dirty and millions died. How similar is big food? (Milbank Quarterly, ‘09)
A Conceptual Scheme
Create “Optimal Nutrition Defaults”
Current Nutrition Defaults
16 oz 32 oz 44 oz 52 oz 64 oz
48 Teaspoons Sugar
Portion Sizes
Too Much Access
Too Little Access
Marketing
AT&T Park, San Francisco Giants’ Stadium
Current Public Health Efforts
The Individual
Educate Knowledge
MedicateOperate
Implore/Embarrass
Motivation
LessObesity?
Creating Optimal Nutrition Defaults
The Individual
EconomicsLegislation
Optimal Defaults
RegulationEnvironment
LessObesity?
Why Focus on Sugary Drinks?
Definition
Single Greatest Source of Added Sugar
Sources of added sugars in US diet, ages 2+, 2005-06
Source: Dietary Guidelines for Americans, 2010
Added Sugar
Average US intake = 45 gallons/yr(170 litres)
Average US child = 193 calories/day
Andreyeva, 2011; Smith, 2010
US Children ages 2-19
Smith, ERS, 2010
Why: Solid Science
Diet Quality Weight gain/obes Type 2 diabetes
Cardiovascular disease
Dental caries Osteoporosis Gout
A Mechanism
Sugar in liquid form less filling than in solid
We don’t compensate for extra liquid calories by eating fewer calories from solid food
Mourao, IJO, 2007; DeCastro Physio Behav, 1993; Harnack, JADA 1999
Calls for Reduction,Price Increases: Canada
Health Canada Heart and Stroke Foundation Chronic Disease Prevention Alliance of
Canada Childhood Obesity Foundation Québec Coalition on Weight-Related
Problems (>150 partners)
Calls for Reduction,Price Increases: US, Int’l
CDC USDA Institutes of Medicine American Academy of Pediatrics American Heart Association
World Health Organization
Why: Empty Calories
250 calories
Why: Gratuitous Addition of Caffeine
Coupled with calories Added to unlikely foods/beverages
– E.g. soda, water, potato chips, jelly beans Supposed taste enhancer Effects: reinforcement, tolerance,
withdrawal
Brownell, Griffiths, & Gold 2008; Keast & Riddell 2007; Griffiths & Vernotica, 2000
RWJF Healthy Eating Research Brief and FTC, 2008
Why: Marketing (youth)
Websites Text messagesEmail Facebook
1955
Coke’s CEO
“We are laser-focused on targeting the right consumers ….To target aging and affluent consumers globally, we are actively exploring new ingredients, new functionality and new occasions. At the same time, we are creating new strategies that are winning over a massive new generation of teens to drive growth of Trademark Coca-Cola.”
Businesswire.com, November 16, 2009
Why Sugary Drinks?
Single greatest source of added sugar Solid scientific proof of harm Completely empty calories Poor calorie compensation Gratuitous addition of caffeine Relentless marketing
An Excise Tax on SSBs
Rationale
Gov’t role to protect citizens if “market failures”– Information deficits: education vs. ads– Immediate gratification vs. future
consequences (esp.children)– Consumers/producers don’t bear full cost
of consumption decisions
Goals
Raise money for obesity prevention
Reduce consumption
Proposal
Penny per ounce– Any beverage w. added sugaror
Penny per teaspoon added sugar– Incentive to reduce sugar
Revenue for obesity prevention
Impact of price changes
10% price increase = 10-12.6% consumption decrease
Penny per oz = approx 20% increase
Smith, 2010; Andreyeva, 2010
Smith, USDA, 2010
Effect on obesity?A 20% price increase in SSBs would decrease:
• Adult calories by 37 per day
• Adult weight by 3.8 lbs /yr (1.7kg)
• Children’s calories by 43 per day
• Adult overweight prevalence by 4.5%
• Child at risk prevalence by 5.3%
Even Larger Effect?
Couple with–Consumer education –Subsidies of fruits/vegetables
Smith, 2010; Chaloupka, 2010; Faulkner, 2010
Why Excise?
Impose on bottler, mfr., distrib. Increases shelf price Includes syrups
Why Not Sales?
No shelf price increase % of product’s price
– Buy larger containers? Misses syrups
Pass the tax on
“A distributor shall add the amount of taxes levied by this act to the price of sugar-sweetened beverages sold to a retailer, and the retailer shall pass the amount of the tax through to a consumer as a component of the final purchase price.”
Industry Response and
Strategies
Industry Defense
It’s about physical activity
The science isn’t clear
It won’t solve obesity
Many things drive obesity
Consumption is down, obesity is up
People will lose jobs
Sugar isn’t so important
False
False
True
True
False
???
False
Use Professional Organizations
American Dietetic Association–Dietitians testify
• No good or bad foods • Personal responsibility• Unfair to target any food/beverage
Industry Response:Re-direct the Focus
Personal responsibility as cause Gov’t action usurps personal freedom Nanny state, “food police”
Front Groups
Americans Against Food Taxes
http://youtu.be/hWi7JI55G-c
Clear on Calories
American Academy ofFamily Physicians
“Health Information for the Whole Family”
Children’s Hospital of Philadelphia
Coke Live Positively
Pepsi Refresh
Freedom of Information Requests
Philadelphia New York City Seattle Centers for Disease Control
Challenge to CDC Grants“…we believe that some of the direction given to states and communities in developing their grant proposals unfairly singles out the soft drink industry for punishment in the form of negative advertising and the imposition of special taxes to discourage consumption.”
Will the US pass a tax?
Context
Budget deficits “No new taxes”State House/Senate majorities
And yet….
Other Legislation
Eliminate sales exemptions or impose sales tax (9 states)
“Swap” legislation: penny per oz for 1% reduction in sales tax (1 state)
SNAP food stamps: (6 states)
Public Support
Greater if funds go to child obesity prevention
New US Initiatives
CDC
Boston Procurement Policy
Hospital Bans
Cleveland Clinic, OH Carney Hospital, Boston MA Fairview Hospital, Gt. Barrington MA
Rudd Center Resources
www.yaleruddcenter.org/ssbtax
Issue Overview and Fact Sheets Tax Information Revenue Calculator Legislation Public Opinion Data Studies Supporting Statements of National Organizations Media Coverage Additional Resources
