It seems like a simple solution: To curb the obesity problem, make unhealthy foods more expensive and people will eat less of them.
Local governments around the country—including Philadelphia, San Francisco, Seattle, and Berkeley, Calif., among others—have started to do just that, enacting laws that tax sugar-sweetened drinks and sodas at a higher rate than other foods and beverages. Sugary drinks are a logical choice. They’re a major contributor to daily American calorie intake—roughly 7 percent of all calories consumed—while contributing little to no nutritional value. Consider that an average 20-ounce cola harbors about 16 teaspoons of added sugar.
These so-called behavior or sin taxes are among the newest weapons being deployed in the complex war to end America’s obesity crisis. The U.S. currently holds the unenviable title of most overweight nation on earth, with more than a third of citizens now considered obese. While a long-term fix to the nation’s obesity epidemic will require much more than just taxation, an in-depth look at early experiments shows promising results—particularly when taxes are targeted at soda and other sugar-heavy drinks.
“Taxation of sugary beverages and junk food is where we have the most solid evidence of an effect,” says Barry Popkin, Ph.D., an economist and professor of nutrition at the University of North Carolina at Chapel Hill. “Overall, it reduces consumption, and particularly for lower-income people, who have a higher incidence of untreated diseases, such as hypertension, diabetes, and other chronic diseases related to excessive consumption of these foods.”
Some countries, such as Chile and Mexico, are way ahead of the U.S. in their sugary-beverage taxation programs. In its recent review of such initiatives, “Using Price Policies to Promote Healthier Diets,” the World Health Organization’s Regional Office for Europe found that such taxes led to a reduction in consumption proportionate to the tax applied, and in many cases demonstrated a reduction in calorie intake.
For instance, a 20 percent levy usually results in roughly a 20 percent usage reduction, according to the WHO review. This equation has proved fairly accurate in American cities that have already established the tax, and it’s exactly what happened in Berkeley, Calif., once a 1-cent-per-ounce levy took effect in 2015.
A recent nationally representative survey of 1,010 adults by Consumer Reports shows that while consumers have mixed feelings about sin taxes, among the 42 percent who favor them, the majority approve of taxing sugar-sweetened beverages.
Kayla Yee Mulkern, a 21-year-old student in Philadelphia, says she’s for soda taxes, and not just because she’s not a soda drinker. “They’re going to get the money from somewhere,” Mulkern says, “so it might as well be from something that might actually make the public make better health decisions.”
Why Focus on Soda?
Seemingly small increases in calories through the years have contributed to America’s current obesity epidemic, which suggests that relatively small adjustments could go a long way toward alleviating it.
The weight gain among Americans stems from what has been estimated to be an increase of roughly 300 calories a day over time, notes Philadelphia health commissioner Thomas Farley, M.D. “Take away one can of soda, which would be about 150 calories, and you’re halfway there to offsetting that,” he says.
To work well, he says, these efforts need to zero in on two groups—the young and the heaviest soda consumers. Those who are overweight in childhood tend to be overweight as adults, he explains.
And Popkin of UNC-Chapel Hill notes that while the average American consumes 150 calories from soda a day, 40 percent of the population consumes 300 to 800. “That’s the group we really want to focus on,” he says.
Not surprisingly, the soda industry opposes beverage taxes, and in recent years has tried to defeat city ballot initiatives to enact taxes, and when new laws do pass, challenge them in court. Industry representatives note that while the rate of obesity has risen in recent decades, overall consumption of sugary drinks in the U.S. has declined by about 27 percent since 1998—mainly as bottled water has gained as a popular alternative.
As these taxes are contemplated, the beverage industry is also responding to consumer concerns about sugar in its marketing. In July, Coca-Cola said that it would change the recipe of its popular Coke Zero product and rename it, now calling it Coca-Cola Zero Sugar in the U.S. market.
Lauren Kane, of the American Beverage Association, says of the targeted beverage taxes now dotting the country: “There is absolutely no proof out there that these things work.”
To be sure, targeted pricing efforts tied to health goals have traditionally had mixed results, research shows. It’s not that such strategies never work, but that they tend to require a lot of heavy lifting and market manipulation and battling with industry to achieve the intended results.
“It’s important to remember that in public health, there is very rarely a single intervention that works,” cautions Jim O’Hara of the Center for Science in the Public Interest, which, along with the WHO, strongly endorses sugar-sweetened-beverage taxes in combination with other measures to reduce consumption and prevent obesity for adults and, especially, children. “There has to be a multifaceted approach: education, policy, taxes, and industry behavior,” O’Hara says.
What We Learned From Cigarettes
Nearly everyone can agree on this: The long and robust campaign against tobacco use in the United States set the gold standard for a successful government health initiative.
The winning formula involved a combination of bold strategies, including high taxation, public education on the dangers of cigarette use, limits on advertising, and a long, grinding battle to restrict where tobacco can be sold and used. And the results have been striking: The smoking rate among American adults has dropped from about 42 percent in 1965 to 15 percent in 2015.
To get there, the financial disincentives for using tobacco have become extraordinarily high—in some places, such as New York City, taxes now add up to more than $5, or about half the cost of a pack of cigarettes. No less significant, though, is that starting in 1971 the tobacco industry grudgingly accepted tough restrictions and bans on advertising in an effort to head off even more draconian measures.
Devising ways to combat obesity, experts say, will require the same kind of enduring dedication and aggressive game plan used on tobacco.
The Carrot-and-Stick Approach
The WHO recommends a multipronged strategy that is part punishment, part reward—leveraging both consumer taxes and marketplace subsidies. It suggests subsidizing the cost of fruits and vegetables by 10 to 30 percent while taxing foods and beverages high in saturated fat, trans fat, added sugars, and sodium.
Bad-behavior levies would in eff ect pay to encourage better behaviors. The public will buy into the taxes, the WHO suggests, “if the revenue they generate is earmarked for efforts to improve health systems, encourage healthier diet, and increase physical activity.”
Results from CR’s survey also suggest that consumers would support that idea, with a large majority saying they’d respond favorably to the “carrot” encouragement approach: While half of Americans say they would not cut back on unhealthy food if it cost more, most (73 percent) say they would eat more healthy food if it cost less.
“It’s not acceptable to a lot of people to have their behavior controlled,” says Ajibade Animasaun, a 63-year-old cab driver in Philadelphia, where a 1.5-cents-per-ounce soda tax went into eff ect at the start of this year. “Yeah, you can tell me you are going to help me with my obesity problem,” Animasaun says, rhetorically, “but not by taxing me to death.”
While people say that they prefer subsidies to punishments, in many cases taxes have been found to work better. Research shows that while a 20 percent tax generally reduces unhealthy behavior by 20 percent, a 20 percent subsidy improves healthy behavior by only 10 percent.
Programs that encourage healthy changes are much less prevalent than those that tax unhealthy habits.
In 2014, Congress earmarked $100 million for a program that would increase the value of Supplemental Nutrition Assistance Program (SNAP) benefi ts—what used to be called food stamps—when they are used to buy fruits and vegetables.
The U.S. Department of Agriculture, which added $16.7 million in funding last fall, characterizes it as a success. And a recent survey of SNAP shoppers at seven farmers markets in the program found that 74 to 94 percent of them had increased either their purchase or consumption of fruits and vegetables. It is not clear whether Congress or the Trump administration will renew the program when it ends in 2018.
While applauding the intent, Popkin worries that such initiatives don’t address the overwhelming prevalence of junk food in the American marketplace, particularly in the diets of children and adolescents. “Going from two to three servings of fruits and vegetables to three-and-a-half servings doesn’t do a lot,” he says, “when you’re also consuming a lot of chips and soft drinks and other junk food.”
Why Consumer Choice Matters
These kinds of behavior taxes and consumer educational efforts have been around for decades and tried, with mixed results, on everything including cigarettes, alcohol, gasoline, fatty foods, and garbage—the latter to encourage recycling.
For example, Denmark tried to tax foods high in saturated fat several years back, but noticed its citizens were simply crossing national borders to load up on their Danish pastry and other gooey delights. So the tax was removed.
And in 2008, New York City rolled out a nutritional content program requiring calorie counts to be posted on menus at fast-food and large chain restaurants. But researchers found that this public awareness effort did almost nothing to steer customers toward healthier alternatives.
In Philadelphia, there was little public support for a soda tax until city officials promised that its millions in projected revenue would go toward funding pre-kindergarten programs.
It will take years, experts say, to determine whether a reduction in soda consumption leads to a corresponding improvement in the health of the community. What’s clear on both a national and individual level is that reducing soda intake won’t help much if people replace sugar-added-beverages with other high-calorie options.
“If you got rid of the 7 percent of calories consumed through soda, would that be enough to affect weight?” asks Jason Fletcher, Ph.D., a professor of public affairs and applied economics at the University of Wisconsin-Madison, who has studied the issue. “The answer is yes, if you take all those calories and just remove them from your diet.” But, he says, “If you substitute those beverages with other high-calorie drinks, then you haven’t reduced your calories at all.”
For example, if an average-sized American adult cut one typical cola from his daily diet and replaced it with a standard serving of orange juice, he’d get more vitamins. But over a year, he would lose only 3 pounds, according to calculations from the National Institutes of Health Body Weight Planner.
If, instead, he substituted water for the large cola, that simple swap would help him lose about 14 pounds and eliminate 52 pounds of added sugars a year from his diet. As Fletcher puts it, we might be asking a tax alone “to do too much work. There may not be a single policy of any sort that’s going to put a dent in the obesity epidemic.”
Lessons From Abroad
Chile has launched what is probably the most ambitious program anywhere. And with reason, given that more than 10 percent of the country’s children under the age of 5 are considered obese.
Its government went well beyond the 18 percent sugar-sweetened-beverage tax already in place on drinks containing a high percentage of sugar. Packaging for products that exceed the limit must bear a health warning label, and Chile now prohibits all advertising for those products aimed at children under 14.
Mexico, with one of the highest diabetes rates among industrialized nations, has instituted a similar program, and it is working. The country’s 1-peso-per-liter tax on sodas, roughly 10 percent of the cost, led to a 6 percent decrease in overall sales and a drop of nearly 12 percent among lower-income citizens.
Popkin of UNC-Chapel Hill has been advising Mexico on its robust campaign. He is hopeful that more progress can be made in the U.S., starting with beverage taxes. But to date, they are only being adopted piecemeal by more health-conscious communities, and the federal government has yet to take steps toward a national tax.
He has no illusions about achieving a quick fix without a multifaceted strategy and more buy-in from Americans. Despite government-sponsored education to encourage healthy eating, nationally the rate of diabetes and other chronic diseases has continued to climb and obesity levels have yet to decline. One-third of American children are overweight or obese as determined by body mass index.
“We’ll be the last country that will be dealing with obesity in a significant way,” Popkin says.
By Catherine Roberts and Thomas Germain in "Consumer Reports", USA, vol. 82, n. 10, October 2017, excerpts pp. 49-53. Digitized, adapted and illustrated to be posted by Leopoldo Costa.