Soft Drink Sales Tax To Pop Even As Market Fizzles
Sales tax on soda will go up from 1.5% to 6.5% in Arkansas next year, under a bill signed by Gov. Hutchinson that aims to raise millions for military retiree tax cuts. The increase is coupled with a tax reduction on the wholesale price for the syrup used by beverage makers, which has advocates for the poor complaining that the higher tax will be paid only by consumers.
The increase comes at a time when soda has largely fallen out of favor with consumers, as they seek healthier alternatives. PepsiCo (NYSE: PEP) spent its advertising dollars this year on a 30 second ad during the Super Bowl promoting its new LIFEWTR premium bottled water instead of its traditional cola drinks.
The decrease in soda consumption is welcome news for author Gary Taubes, who published The Case Against Sugar in December and is well-known for an April 2011 article in New York Magazine in which he presented the controversial theory that sugar is uniquely harmful independent of its caloric content.
“If I’m right, we should be saying that sugar causes diabetes in the same way that we say that tobacco causes lung cancer,” said Taubes, who titled the last chapter of his book “How Little is Still Too Much?” to emphasize the theory that any amount of sugar may be too toxic for human consumption, just as no amount of cigarette smoking is considered safe.
Taubes agreed that that there are economic and social consequences to his theory, since arguing that someone shouldn’t have a few cookies during an afternoon work slump or that a kid shouldn’t have a slice of birthday cake doesn’t exactly make one popular. He told Arkansas Public Media that the working title for his book was “Stealing Christmas: The Case Against Sugar” because he wanted to acknowledge that many people would react to his theory as they would to “a Grinch who wants to take all joy out of life.”
Taubes talked about the evolution of nutritional theory, where fat was settled on as the culprit for obesity and resulting diseases. His book draws a strong correlation between sugar and diabetes, which currently affects a shocking one in eleven Americans.
“By the late 1970’s when we embraced this dietary wisdom that we all grew up on, that the essence of a healthy diet is a low-fat diet, all the government’s efforts were aimed at getting us to eat less fat and the industry at creating low-fat products. And in the process, almost as an unintended consequence, was this belief that sugar was effectively benign. That the worst you could say about it is that it’s empty calories and that we eat too much of it,” Taubes said.
Dennis Farmer, president of the Arkansas Beverage Association, said the decrease in sugary beverage consumption may be due in part to the much greater variety of other beverage options these days, such as juices, ready to drink teas, coffee and espresso flavored drinks and bottled waters with a variety of flavors or added nutrients. After being predicted for several years, bottled water finally overtook soda as the most commonly purchased convenience drink by August 2016.
Farmer said the beverage industry is concerned about the obesity epidemic and is doing its part to help, such as volunteering not to sell or market soda in elementary schools and working on the Balance Calorie Initiative, which aims to help Americans reduce the calories they consume through beverages by 20% by the year 2025. Little Rock serves as a test city for the initiative.
“We’ve been involved with the issue for quite a while. And the fact that we have calories in many of our products, just like lots of other foods, if too much is consumed you can gain weight. And so realizing that we’re part of it, we have taken these two very positive initiatives,” said Farmer. He said soda is now offered in much smaller bottles and cans than years past, and many consumers are now reaching for waters, teas and juices.
Dr. Brookshield Laurent, Vice Chair for the Department of Clinical Medicine at the New York Institute of Technology College of Osteopathic Medicine at Arkansas State University, said she hopes that trend continues, for the sake of helping people avoid diabetes, which in an uncontrolled state can lead to eye disease, kidney disease and non-alcoholic liver disease. She said patients who have given up sugary beverages have told her that they feel better, are more energized and sleep better, since some of those beverages also contain caffeine.
“Anytime anyone is changing a behavior, I always encourage them to do incremental steps. So if you are ordering large volumes of these beverages, go for smaller beverages. If you need to go for a diet soda, it would certainly be preferred, but water is always the best way to go,” she said, also urging people visiting a coffee shop to avoid whole milk, get a smaller size and be mindful about how much sugar they are consuming through beverages.