May 17, 2018 at 5:00 am ET
Combating the rise in obesity is a major health challenge here in America and around the world.
According to the Trust For America’s Health and the Robert Wood Johnson Foundation, obesity rates have increased in all 50 states since 1990; the Centers for Disease Control and Prevention notes obesity is associated with the leading causes of death in the U.S. and worldwide.
Some argue the way to address this critical issue is for governments to force behavior changes through higher taxes on food and beverages. But these calls for taxes ignore many studies showing taxes are not effective in reducing obesity rates.
While obesity rates have increased, consumption of sugar-sweetened beverages has declined since the mid-1990s. And research shows local beverage taxes in the U.S. and around the world fail to curb sugar consumption and lead to equally unhealthy shifts in purchasing habits, like substituting other sweetened products that are not taxed or shopping in neighboring communities that don’t have taxes on food or beverages.
Where beverage taxes have been passed, the approach has actually hurt the people who can least afford it. That’s why Dr. Edward Livingston, deputy editor of the Journal of the American Medical Association, has noted these trends mean taxing beverages “may be the wrong approach for attempting to counteract obesity.”
Philadelphia is a case study on the unintended damaging effects resulting from these initiatives. According to a study by Oxford Economics from December, some shoppers simply left the city limits to buy their food and beverages, thereby avoiding the tax. In the year after the tax was implemented, Philadelphia bottlers’ sales declined 29 percent inside city limits, while surrounding areas not subject to the tax saw beverage sales increase 26 percent.
In Philadelphia and elsewhere, researchers noted there was often a substitution effect in response to the local beverage tax. Oxford Economics found shoppers in Philadelphia substituted in sugary powdered drink mixes, which were not subject to the tax.
In Berkeley, Calif., Duke University’s Bryan Bollinger and Steven Sexton noted half of the decrease in beverage consumption from the tax at local supermarkets was made up by increased beverage purchases just outside the city. Meanwhile, consumption of non-alcoholic, high-calorie beverage products like smoothies, milkshakes and horchatas also increased within the city. In the end, overall calorie consumption did not decline as a result of Berkeley’s citywide beverage tax.
Around the world, researchers have come to similar conclusions. In Mexico, the impacts of the beverage tax were far too small to have meaningful health benefits. Researchers noted the reduction in calories consumed from the tax was indistinguishable from zero.
At the New Zealand Institute of Economic Research, an analysis concluded there was neither evidence that a sugar tax would meet a cost-benefit test, nor the possibility of a causal link between tax and health outcome improvement.
The Oxford Economics study, conducted in partnership with the American Beverage Association, also observed the damaging economic effects of the Philadelphia beverage tax. In the first year, the initiative led to an employment decline of almost 1,200 workers and a $4.5 million loss in local tax revenue in the city.
According to the mayor’s office, the revenue has fallen short of previous projections, forcing the city to cut anticipated preschool and community school programs. And a recent report from the Philadelphia city controller revealed that only about 25 percent of the funds collected were being used to fund education or infrastructure, while 74 percent had gone directly to the city’s general fund.
With results like these, it’s no surprise consumer outrage led local officials to repeal the sweetened beverage tax in Cook County, Ill.
“I’ve never heard so much animosity to a tax than this,” said John Daley, a Cook County board commissioner. “People were telling me they’d go to Indiana to buy soda, and they weren’t just buying their sodas there, but all their other groceries, too.”
Instead of passing policies that hurt the people they’re intended to help, there’s a better way to change consumer behavior and help empower more people to live healthy, balanced lifestyles in the U.S. and around the world. That’s why leaders in the food and beverage industry are working together with public health and government officials to increase consumer education and expand access to low- and no-calorie beverage options.
Working together, the leaders of the beverage industry have committed to cutting sugar in products, pulled full-calorie sodas from schools, developed smaller serving sizes, and voluntarily changed their packaging to provide more explicit calorie labels. Fierce rivals such as Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group Inc. are offering consumers more choices, more information and smaller portion sizes to help more people live healthy, balanced lives. As a result of these efforts, nearly half of beverages consumed today are calorie-free, and the number of beverage calories delivered to schools has been cut by 90 percent.
Instead of penalizing consumers, local governments and public health officials should work with private-sector leaders to empower people to make balanced nutrition decisions that work for their families. The alternative — as we’ve seen in Berkeley, Philadelphia, Mexico and around the world — simply doesn’t work in the fight to end obesity.
Susan Neely is president and CEO of the American Beverage Association, and she serves on the boards of the Global Child Nutrition Foundation, the Congressional Coalition on Adoption Institute, U.S. Chamber of Commerce, and the American Council for Capital Formation.
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