Sticky Sweet Biz Seeks to Block Taxes on Things that Make us Fat, Sick & Costly

Healthcare panel at PBLN's Washington Summit 2010
 L to R: Neera Tanden, COO of the Center for American Progress;
Paul Egerman, former CEO eScription; Maria Ghazal, Business
Roundtable; Shailagh Murray, Washington Post; Jim Roosevelt,
CEO, Tufts Health Plan

We have both an obesity problem and a healthcare cost problem in the United States. Food industry companies of all sizes are aware of the connection between the two, and are making diverse adjustments in product and PR to address the impact on their profits. Some studies link the obesity problem in part to the presence of high fructose corn syrup in widely consumed products like sweetened soda and fruit drinks. Concern about the role of these sweet treats in health and healthcare costs is why in many states, efforts are underway to add a modest tax to the purchase price of these products.

Phil Edmundson (right) is CEO of William Gallagher
Associates. Phil is a recognized leader on health policy
in Massachusetts, and an advocate for removing the sugar
tax exemption. He is pictured here speaking with PBLN
member J.J. Bartlett, CEO of Fishing Partnership Health
 Plan at PBLN's Fall 2009 Summit in Boston

Trouble is, according to the Wall Street Journal (thank you Phil Edmundson for posting the article on Facebook)  and other well-documented recent reports, the "industry" is opposing these taxes (or in the case of Massachusetts, the mere removal of a tax exemption that applies very broadly to other consumer goods) and digging in its heels. The usual threats include job losses at bottling plants, fear of overburdening strapped consumers, etc. Where is the progressive soda industry voice that recognizes the public health issue here and has a thoughtful solution? The need for revenue to cover the healthcare cost of people who make themselves sick on soda? Is this going to have to go the way of the tobacco wars, with denial and denial and denial, and no corporate accountability or partnership with government to solve the problem?

One great source is a comprehensive treatment of it by no less than  the New England Journal of Medicine. The article which only subscribers can access online (we are working on getting a copy to post here) begins with this statement (footnotes omitted):

The consumption of sugar-sweetened beverages has been linked to risks for obesity, diabetes, and heart disease; therefore, a compelling case can be made for the need for reduced consumption of these beverages. Sugar-sweetened beverages are beverages that contain added, naturally derived caloric sweeteners such as sucrose (table sugar), high-fructose corn syrup, or fruit-juice concentrates, all of which have similar metabolic effects. Taxation has been proposed as a means of reducing the intake of these beverages and thereby lowering health care costs, as well as a means of generating revenue that governments can use for health programs...


A Forbes piece raises questions about whether the federal version of the soda tax would have any impact on obesity, and even takes on aspects of the New England Journal of Medicine piece. More policy and business analysis on this issue to come in this space....

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