Soda tax: No fizz

After a five-year respite, the prospect of a national soda tax is making waves once again. Recently, Rep. Rosa DeLauro (D-Conn.) introduced legislation in the House to impose a national tax on sugar-sweetened beverages. The Sugar Sweetened Beverages Tax Act of 2014, or the “SWEET Act,” would impose a one-cent per ounce tax on the sale or transfer of any specified sugar-sweetened beverage product by the manufacturer, producer, or importer.

The proposed legislation would be the first of its kind since a 2009 proposal to link a similar tax to the Affordable Care Act. It is also the most significant federal response to the groundswell of local and state tax proposals to curb consumption of sugar-sweetened beverages in the name of solving American’s obesity and health challenges.

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Particularly in light of the pending ballot initiatives on soda tax proposals in Berkeley and San Francisco, California, the resurgence of this debate is troublesome. It is a classic example of unnecessary governmental overreach to “solve” a situation that industry leaders have been addressing for many years. Although the intention behind the proposals—that is, improving the health of U.S. citizens—is sound and laudable, the unintended consequences will far outweigh the benefits.

First of all, taxes of any kind on sugar-sweetened beverages will create new liabilities for vending and food services companies, which could result in loss of critical jobs and taxable revenue, and will drive up food and beverage costs. While the supporters of the SWEET Act claim that the new tax will help alleviate obesity and health issues related to sugar intake, it will ultimately prove to be a painful hindrance to small business, the same businesses who were among the first in the industry to provide nutrition information to their consumers.

The National Automatic Merchandising Association (NAMA), which represents the vending industry, in 2005 launched its nationally recognized FitPick healthy vending labeling program, to assist vending operators and consumers in identifying products that meet recognized nutrition guidelines. FitPick provides nutrition information for vended products and the tools needed to make an educated decision when making their personal snack and beverage choices.

The American Beverage Association (ABA) recently created the Calories Count Beverage Vending Program, to disclose caloric content at the point of purchase. Like FitPick, information is provided through signage on the front of the vending machines. Calorie labels on selection buttons and visible product labeling, showing total calories per beverage container, are also part of the forward-facing program. This offers consumers clear and visible calorie information and encourages lower-calorie beverage choices.

New taxes proposed by the SWEET Act on beverages are, quite simply, an ineffective way to encourage healthy lifestyles or to combat obesity among consumers. In fact, as per government data, sugar-sweetened beverages account for less than 7 percent of calories in the average American diet. A federal tax of this nature is a prime example of the kind of government overreach that completely dismisses the role of consumer choice and responsibility.

Consumers yearn for transparency and information, and businesses want their customers happy. The vending and beverage industries have clearly taken great strides in providing consumers with information and transparency for their consumption choices. This progress is evidence that the need for new taxes on sugar-sweetened beverages is unwarranted. Instead of new taxes, government officials should work with the industries to promote existing and future education and informational programs at no cost to taxpayers or the government. The marketplace is voluntarily evolving to align with the country’s increasing health-consciousness, and trusting that consumers are capable of making informed choices about the products they wish to purchase.

Dell is senior vice president of Government Affairs at the National Automatic Merchandising Association (NAMA).