Presentation
DANNYZ
topic.pdf
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T h e N EW ENGL A N D JOU R NA L o f M EDICI N E
april 30, 2009
1n engl j med 10.1056/nejmp0902392
The obesity epidemic has in-spired calls for public health measures to prevent diet-related diseases. One controversial idea is now the subject of public debate: food taxes.
Forty states already have small taxes on sugared beverages and snack foods, but in the past year, Maine and New York have pro- posed large taxes on sugared bev- erages, and similar discussions have begun in other states. The size of the taxes, their potential for generating revenue and reduc- ing consumption, and vigorous opposition by the beverage indus- try have resulted in substantial controversy. Because excess con-
sumption of unhealthful foods underlies many leading causes of death, food taxes at local, state, and national levels are likely to remain part of political and pub- lic health discourse.
Sugar-sweetened beverages (soda sweetened with sugar, corn syrup, or other caloric sweeteners and other carbonated and uncar- bonated drinks, such as sports and energy drinks) may be the single largest driver of the obe- sity epidemic. A recent meta- analysis found that the intake of sugared beverages is associated with increased body weight, poor nutrition, and displacement of more healthful beverages; in-
creasing consumption increases risk for obesity and diabetes; the strongest effects are seen in stud- ies with the best methods (e.g., longitudinal and interventional vs. correlational studies); and in- terventional studies show that re- duced intake of soft drinks im- proves health.1 Studies that do not support a relationship between consumption of sugared bever- ages and health outcomes tend to be conducted by authors support- ed by the beverage industry.2
Sugared beverages are market- ed extensively to children and adolescents, and in the mid-1990s, children’s intake of sugared bev- erages surpassed that of milk. In the past decade, per capita intake of calories from sugar-sweetened beverages has increased by nearly 30% (see bar graph)3; beverages now account for 10 to 15% of the calories consumed by children and adolescents. For each extra can or glass of sugared beverage
Ounces of Prevention — The Public Policy Case for Taxes on Sugared Beverages Kelly D. Brownell, Ph.D., and Thomas R. Frieden, M.D., M.P.H.
Sugar, rum, and tobacco are commodities which are nowhere necessaries of life, which are become objects of almost universal consumption, and which are therefore extremely proper subjects of taxation.
Adam Smith, The Wealth of Nations, 1776
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consumed per day, the likelihood of a child’s becoming obese in- creases by 60%.4
Taxes on tobacco products have been highly effective in reducing consumption, and data indicate that higher prices also reduce soda consumption. A review con- ducted by Yale University’s Rudd Center for Food Policy and Obesity suggested that for every 10% increase in price, consumption decreases by 7.8%. An industry trade pub- lication reported even larg er reductions: as prices of car- bonated soft drinks increased by 6.8%, sales dropped by 7.8%, and as Coca-Cola pric- es increased by 12%, sales dropped by 14.6%.5 Such stud- ies — and the economic prin- ciples that support their find- ings — suggest that a tax on sugared beverages would encour- age consumers to switch to more healthful beverages, which would lead to reduced caloric intake and less weight gain.
The increasing affordability of soda — and the decreasing affordability of fresh fruits and vegetables (see line graph) — probably contributes to the rise in obesity in the United States. In 2008, a group of child and health care advocates in New York proposed a one-penny-per-ounce excise tax on sugared beverages, which would be expected to re- duce consumption by 13% — about two servings per week per person. Even if one quarter of the calories consumed from sug- ared beverages are replaced by other food, the decrease in con- sumption would lead to an esti- mated reduction of 8000 calories per person per year — slightly more than 2 lb each year for the average person. Such a reduction in calorie consumption would be
expected to substantially reduce the risk of obesity and diabetes and may also reduce the risk of heart disease and other condi- tions.
Some argue that government should not interfere in the mar- ket and that products and prices
will change as consumers demand more healthful food, but several considerations support govern- ment action. The first is exter- nality — costs to parties not di- rectly involved in a transaction. The contribution of unhealthful diets to health care costs is al- ready high and is increasing — an estimated $79 billion is spent annually for overweight and obe- sity alone — and approximately half of these costs are paid by Medicare and Medicaid, at taxpay- ers’ expense. Diet-related diseas- es also cost society in terms of decreased work productivity, in- creased absenteeism, poorer school performance, and reduced fitness on the part of military recruits, among other negative effects.
The second consideration is in- formation asymmetry between the parties to a transaction. In the case of sugared beverages, marketers commonly make health claims (e.g., that such beverages provide energy or vitamins) and
use techniques that exploit the cognitive vulnerabilities of young children, who often cannot dis- tinguish a television program from an advertisement.
A third consideration is reve- nue generation, which can further increase the societal benefits of
a tax on soft drinks. A penny- per-ounce excise tax would raise an estimated $1.2 bil- lion in New York State alone. In times of economic hard- ship, taxes that both generate this much revenue and pro- mote health are better options than revenue initiatives that may have adverse effects.
Objections have certainly been raised: that such a tax would be regressive, that food taxes are not comparable to tobacco or alcohol taxes be- cause people must eat to sur-
vive, that it is unfair to single out one type of food for taxa- tion, and that the tax will not solve the obesity problem. But the poor are disproportionately af- fected by diet-related diseases and would derive the greatest benefit from reduced consumption; sug- ared beverages are not necessary for survival; Americans consume about 250 to 300 more calories daily today than they did several decades ago, and nearly half this increase is accounted for by con- sumption of sugared beverages; and though no single interven- tion will solve the obesity prob- lem, that is hardly a reason to take no action.
The full impact of public poli- cies becomes apparent only after they take effect. We can estimate changes in sugared-drink con- sumption that would be prompt- ed by a tax, but accompanying changes in the consumption of other foods or beverages are more difficult to predict. One question
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Daily Caloric Intake from Sugar-Sweetened Drinks in the United States.
Data are from Nielsen and Popkin.3
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is whether the proportions of calories consumed in liquid and solid foods would change. And shifts among beverages would have different effects depending on whether consumers substi- tuted water, milk, diet drinks, or equivalent generic brands of sug- ared drinks.
Effects will also vary depend- ing on whether the tax is de- signed to reduce consumption, generate revenue, or both; the size of the tax; whether the revenue is earmarked for programs relat- ed to nutrition and health; and where in the production and dis- tribution chain the tax is applied. Given the heavy consumption of sugared beverages, even small taxes will generate substantial revenue, but only heftier taxes will significantly reduce consumption.
Sales taxes are the most com- mon form of food tax, but be- cause they are levied as a per- centage of the retail price, they encourage the purchase of less-
expensive brands or larger con- tainers. Excise taxes structured as a fixed cost per ounce provide an incentive to buy less and hence would be much more effective in reducing consumption and im- proving health. In addition, man- ufacturers generally pass the cost of an excise tax along to their customers, including it in the price consumers see when they are making their selection, where- as sales taxes are seen only at the cash register.
Although a tax on sugared beverages would have health ben- efits regardless of how the reve- nue was used, the popularity of such a proposal increases great- ly if revenues are used for pro- grams to prevent childhood obe- sity, such as media campaigns, facilities and programs for phys- ical activity, and healthier food in schools. Poll results show that support of a tax on sugared bev- erages ranges from 37 to 72%; a poll of New York residents found
that 52% supported a “soda tax,” but the number rose to 72% when respondents were told that the revenue would be used for obe- sity prevention. Perhaps the most defensible approach is to use rev- enue to subsidize the purchase of healthful foods. The public would then see a relationship be- tween tax and benefit, and any regressive effects would be coun- teracted by the reduced costs of healthful food.
A penny-per-ounce excise tax could reduce consumption of sug- ared beverages by more than 10%. It is difficult to imagine produc- ing behavior change of this mag- nitude through education alone, even if government devoted mas- sive resources to the task. In con- trast, a sales tax on sugared drinks would generate considerable rev- enue, and as with the tax on to- bacco, it could become a key tool in efforts to improve health.
No potential conf lict of interest relevant to this article was reported.
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Relative Price Changes for Fresh Fruits and Vegetables, Sugars and Sweets, and Carbonated Drinks, 1978–2009.
Data are from the Bureau of Labor Statistics and represent the U.S. city averages for all urban consumers in January of each year.
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Dr. Brownell is a professor and director of the Rudd Center for Food Policy and Obesity, Yale University, New Haven, CT. Dr. Frieden is the health commissioner for the City of New York.
This article (10.1056/NEJMp0902392) was published at NEJM.org on April 8, 2009.
Vartanian LR, Schwartz MB, Brownell KD. 1. Effects of soft drink consumption on nutrition
and health: a systematic review and meta- analysis. Am J Public Health 2007;97:667-75.
Forshee RA, Anderson PA, Storey ML. 2. Sugar-sweetened beverages and body mass index in children and adolescents: a meta- analysis. Am J Clin Nutr 2008:87:1662-71.
Nielsen SJ, Popkin BM. Changes in bever-3. age intake between 1977 and 2001. Am J Prev Med 2004;27:205-10. [Erratum, Am J Prev Med 2005;28:413.]
Ludwig DS, Peterson KE, Gortmaker SL. 4. Relation between consumption of sugar- sweetened drinks and childhood obesity: a prospective, observational analysis. Lancet 2001;357:505-8.
Elasticity: big price increases cause Coke 5. volume to plummet. Beverage Digest. No- vember 21, 2008:3-4. Copyright © 2009 Massachusetts Medical Society.
Ounces of Prevention — The Public Policy Case for Taxes on Sugared Beverages
