DeLauro Introduces Sugar-Sweetened Beverages Tax

"SWEET Act" would add about 9 cents to the cost of a 12-oz. Coke

Published in CSP Daily News

By  Steve Holtz, Online News Director & Beverage Editor

WASHINGTON -- Keeping an earlier promise, Congresswoman Rosa DeLauro (D-Conn.) introduced the Sugar-Sweetened Beverages Tax (SWEET) Act on Wednesday in her announced goal to tackle the dual epidemics of obesity and diabetes by discouraging excessive sugar in beverages. The SWEET Act would institute a tax of 1 cent per teaspoon of caloric sweetener, such as sugar or high-fructose corn syrup.

This would add about 9 cents to the cost of a 12-ounce can of Coke, for example. Exceptions to the rule include milk and plant-based milk substitutes, 100% fruit or vegetable juices, infant formula, dietary aids and alcoholic beverages.

“People want to be healthy, and they want their kids to be healthy. But we are in the midst of dual epidemics, with obesity and diabetes afflicting our nation and the related, astronomical health care costs," DeLauro said in unveiling the tax proposal. "There is a clear relationship between sugar-sweetened beverages and a host of other health conditions, including diabetes, heart disease, obesity and tooth decay. We are at a crucial tipping point, and the SWEET Act will help correct the path we are currently on.”

The revenue raised by the SWEET Act would be used to fund initiatives designed to reduce the human and economic costs of obesity, diabetes, dental problems and other health conditions related to sugar-sweetened beverages. This includes prevention and treatment programs, research and nutrition education. Such diseases are responsible for an estimated $190 billion in annual health care costs, over 20% of which are paid by American taxpayers through Medicare and Medicaid, according to DeLauro. The bill is supported by a coalition of public health and consumer groups.

Also, DeLauro sent a letter to Food and Drug commissioner Margaret Hamburg, supporting her decision to keep added sugars as a stand-alone line on the proposed revised Nutrition Facts panel.

DeLauro promised in June during the National Soda Summit in Washington to introduce legislation to tax sugary beverages. The Soda Summit was sponsored by the Center for Science in the Public Interest.

At that time, DeLauro called sugary drinks "one of the biggest culprits of today's obesity and diabetes crises. Our food is being overloaded with added sugar. ... Many times it is the sugary foods and drinks that are the easiest for families living on the edge of poverty to afford. When a 2-liter cola is 99 cents and blueberries are over $3, something has gone very wrong."

The American Beverage Association quickly came out in opposition to the tax, posting on its website Wednesday: "The soda tax is an old idea that has gotten no traction in federal government, states and cities across the U.S. People don’t support taxes and bans on common grocery items, like soft drinks. That’s why the public policy debate in the U.S. has moved away from taxes and bans and onto real solutions.

"Our industry is focused on meaningful solutions that help address the complex issue of obesity. Working with First Lady Michelle Obama, President Bill Clinton, the U.S. Conference of Mayors and others, we have voluntarily removed full-calorie soft drinks from schools nationwide, placed calorie labels on all of our packaging as well as on vending machines, supported community programs that promote balanced diets and physical activity and much more."

Also, in response to CSP Daily News' June report on DeLauro's Soda Summit statements, a representative of the American Beverage Association posted this comment on CSPnet.com:

"Let’s put this issue in perspective. As rates of obesity have climbed over the past four decades, sugar-sweetened beverage consumption has declined. In fact, these beverages make up a relatively small portion of the calories in the average American diet. Of the additional calories Americans are consuming, USDA data makes clear that fats, oils and starches comprise the lion’s share. So what would targeting sugar-sweetened beverages with a federal tax accomplish? Nothing, other than drive up costs from consumers.

"If we want to change health behaviors, education that focuses comprehensively on overall diet and physical activity will prove more productive than shortsighted regulations."

Beverage analyst Nik Modi of RBC Capital Markets told CSP Daily News this is another example of taxation that will end up hitting low-income families the hardest.

"Manufacturers treat taxes as a cost of doing business and usually pass through the increased cost onto the consumer," he said. "As such, the tax would likely be regressive as lowest-income households are generally the biggest proportionate consumers of sugary drinks.

"Taxation doesn't seem like the best way to address obesity," he added, "and we prefer education and better ingredient labeling so consumers can make their own decisions."

By Steve Holtz, Online News Director & Beverage Editor
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