The Sweet Act - A (Small) Step Forward

This past Wednesday, Congresswoman Rosa DeLauro from Connecticut introduced a bill to the House of Representatives that would place a tax on beverages, to the tune of 1¢ per 4.2 grams of sweetener. 

The tax revenues garnered from the new law would be used to pay for a variety of social service programs aimed at preventing and treating obesity, diabetes, and other lifestyle diseases associated

Here’s give you an idea of what that would translate to for the consumer:

Product	Grams of Sugar	Proposed Tax
Red Bull (8 oz can)	27	$0.06
Coca-Cola Classic (12 oz can)	39	$0.09
Minute Maid Orange Juice (16 oz)	48	$0.11
Mountain Dew (20 oz bottle)	124	$0.30
Coca-Cola 2 Litre	216	$0.51
Coca-Cola Case (24 cans)	936	$2.23
Sugar content obtained from SugarStacks http://www.sugarstacks.com/beverages.htm

A ten-cent tax on a can of soda might not make or break anyone’s buying decision, but there is a lot of merit to the idea of creating a sin tax for “junk food” if you’re trying to cut down on the obesity epidemic in America. 

The law (available as a PDF here) spends page after page describing findings about the current state of the nation when it comes to bad eating habits and the health risks associated with them.  Ms. DeLauro’s goal is admirable, but you have to wonder why, if she wants to go after obesity as a whole, she is restricting her tax only to sweetened beverages? And why does it only go after sugar? 

Weight gain, after all, is a matter of calories – the body is like a giant engine that burns them for fuel; if you put in more than the engine can burn, it gets stored to for later as fat.  It doesn’t matter if those calories come from sugar, protein, fats, or other non-sugar carbohydrates.

If the goal here is to reduce obesity, the logical next step would be a tax on calories, and it should apply across all prepared foods, not just beverages.  Now, taxing every calorie would be ridiculous, but you could set a certain allowance by serving size.  Let’s call it a 250-calorie “allowance” on serving size.  Anything over 250 in a single serving and you get slapped with a 1¢ tax per 10 calories. 

Here’s a sampling of what this kind of “calorie” tax would look like for a variety of foods (including the sodas listed above):

Product	Calories	Proposed Tax
McDonald’s Big Mac	550	0.30
Taco Bell Chicken Ranch Fully Loaded Taco Salad	960	0.71
Applebee’s Quesadilla Burger	1440	1.19
Red Robin "Monster Meal" (Burger and Fries)	3540	3.29
Coca-Cola Classic (12 oz can)	156	0.00
Minute Maid Orange Juice (16 oz)	192	0.00
Mountain Dew (20 oz bottle)	496	0.25

So, the small time sugary drinks would escape the tax, but the big offenders – the massive, gut-busting meals that make up a chunk of the 85-90% of kids daily calories that do not come from soda would get hit.  And, in some cases, hit hard.  Yes, you can have your burger and fries that exceed the entire recommended daily allowance in a single sitting, but it’s not going to be the easy option on your pocket book!

For what it’s worth, The SWEET act is pretty well doomed for failure given the current makeup of the House of Representatives, which would be loath to add anything to the Affordable Care Act.  But, rest assured, this will certainly not be the last salvo in the war on obesity in the United States, and food companies need to understand that they are going to be in the crosshairs at some point.  Healthy serving sizes are going to be the only safe path forward – what are you doing to reorient your brand portfolio more towards them?