Obesity: A taxing solution

Franklin’s point was underlined last week though, when one US state proposed a ‘soft drink tax’ in order to combat child obesity. So is it time to put our health where are wallets are? Policing consumer choice through mechanisms like tax worries many and is sometimes counter productive, but with the current economic global downturn, the time may be right to think again. After all, financially protecting staple food and drink products, as well as more nutritionally sound goods is of vital importance in a market where consumers are increasingly feeling the pinch in their grocery bills. Fears over how downturn may affect shoppers’ commitments to diet and other sustainable produced goods appears mixed. Though analysts suggest that health targeted goods are retaining sales, some softness is predicted in organic and eco-friendly product consumption. Nonetheless, New York State governor David Patterson has used his latest budget to announce plans for imposing additional duties on sugary beverages, like carbonated drinks, as a new method of cutting high consumption levels amongst children. Patterson and others believe such products are a significant contributor to rising levels of childhood obesity. Citing Harvard University research, Patterson argues that for both adults and children alike, consuming soft drinks everyday can increase the risk of obesity. He believes that an 18 per cent tax rate on such beverages could drive a five per cent decline in consumption. Perhaps he has a point though, with the tax, rather than being a burden to the industry, potentially providing an opportunity to continue with its claims of moving ahead with greater product diversity. The American Beverage Association (ABA) has rejected Patterson’s proposals, suggesting, perhaps fairly, that targeting one single type of product cannot provide an effective solution to a complicated problem like obesity. The trade group also suggested that the decision was poorly timed because families are already struggling to make ends meet. “Singling out one particular product for taxation won’t even make a dent in a problem as complex as obesity,” stated the ABA. “This point is supported by science as well as common sense.” However, is the ABA missing the point? Surely, it is extremely relevant in the current economic climate to ensure that healthier products are financially protected? Drink makers and food formulators as a whole may be concerned by such a tax, especially with the ongoing fears over nutrition labelling and the definition of ‘junk food’. But the trend away from more sugary beverages may serve to force the industry to rethink the products it is putting out to consumers, despite it stated commitments to social responsibility. One recent UK study compiled by independent analyst TNS, suggested that in 2007, growing obesity fears ensured juice-based drinks, bottled water and milk were twice as likely to be chosen over higher sugar drinks as in 1993. A similar push then on taxing all high added-sugar products may just help shift consumer demand in the difficult times ahead. Whether the tax proposals might not please everyone, the potential opportunities for food and drink makers to diversify towards lower sugar formulations may prove a real tonic to current economic concerns. In these uncertain times, that has to be a good thing. Neil Merrett is a staff reporter for BeverageDaily.com, and has written on a variety of issues for publications in both the UK and France and as a rule, dislikes expensive things. If you would like to comment on this article, please e-mail Neil.Merrett 'at' decisionnews.com.

Obesity: A taxing solution

Benjamin Franklin once said that nothing is certain in life but death and taxes, conveniently forgetting the human race’s desire to avoid both inconveniences at any cost.

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