I'd Like to Buy the World a Coke - And Slap It With a Big Fat Sugar Tax

I wouldn't be surprised at all if local sugar-and-fructose taxes start appearing in city after city, as one politician after another races to jump on the bandwagon.
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In July 1971, Coca-Cola debuted a commercial that remains famous in the fizz of marketing history. Shot on a hill outside Rome, the spot -- featuring a diverse group of winsome, cleaned-up hippies singing a pop song with a folky vibe -- was a phenomenon.

The spot was a clever way of tethering the mainstream Coke brand to the emerging counter-culture, and making it zeitgeist-worthy. And believe it or not, people genuinely loved the song and the message of global kumbaya.

In fact, the song -- re-recorded without any reference to Coke -- became a #1 hit in the UK and #7 here. And in an early example of cause-marketing, The Coca-Cola Company donated its royalties to UNICEF.

Today, the song has its own Wikipedia page. What more can we say?

How times and tides have shifted in the last 39 years.

Today, Coca-Cola has flipped from the right side to the wrong side of a movement. They are in the crosshairs of an upheaval that's looking to demonize high-fructose beverages, and to blame our soaring health care costs and obesity epidemic on them. A movement that actually wants to slap a sin-and-slurp tax on every bottle to discourage consumption.

Just this week, in a long feature story, NPR reported that "One idea that has been suggested is a junk food tax -- and in particular, a tax on soda."

The story went on to say that "Public health advocates say drinking soda is directly linked to obesity, which is partly responsible for skyrocketing health care costs."

They reference a study conducted by the California Center for Public Health Advocacy, with UCLA, which found that "... regardless of income or ethnicity, adults who drink one or more sodas a day are 27 percent more likely to be overweight or obese."

How much money could a tax produce? In a much-quoted story from this month's New England Journal of Medicine, Kelly Brownell director of Yale's Rudd Center for Food Policy and Obesity, argues that a federal soda tax could generate $150 billion of ten years.

Even worse for the hilltop crowd, Brownell invoked the "T" word:

"Using a tax, much as has happened with tobacco, to try to change consumption patterns in a way that would benefit overall public health and provide a very much-needed revenue for programs, seems like a home run."

What's scary for Coke is that this movement is feeding into two powerful forces.
One is a general muscle-flexing by local officials, from mayors to Attorneys-General. Perhaps the most visible mover-and-shaker is Mayor Bloomberg of New York, who is often accused of Nanny Statism for his (successful) efforts to force fast-food companies to display calorie counts. Along with other aggressive nutritional interventions, Mayor Mike appears to be channeling Michael Pollan at times.

In California, where menu ingredients can have longer histories than college application essays, Mayor Gavin Newsom is also trying to take the fizz out of Pepsi, Coke, and even uber-chic artisanal-esque manufacturers like Jones Soda.

According to the San Francisco Chronicle, Newsom ha actually tagged soda as "...the new tobacco" and plans to "introduce legislation this fall that would charge a fee to retailers that sell sugary beverages."

The story reminds us that "Newsom would need voter approval to tax individual cans of soda and sugary juice, but only needs approval from the Board of Supervisors to levy a fee on retailers. His legislation would charge grocery stores like Safeway and big-box stores."

And it's not limited to soda. Yesterday's New York Times pointed out that Richard Blumenthal, the Connecticut Attorney General, has no patience with an industry-wide "Smart Choices" marketing campaign. They say he is "Raising the stakes in the battle over nutritional claims for packaged foods" by "investigating a national labeling campaign that promotes products like Froot Loops and mayonnaise as nutritionally smart choices."

Blumenthal sent blistering letters to Kellogg's, General Mills and Pepsi in which he admonished them that he "was concerned that the program, called Smart Choices, was 'overly simplistic, inaccurate and ultimately misleading.'"

Beyond energized local entities feeling their organic oats, the second trend that should send tremors through Atlanta -- if it isn't already -- is a shift in consumer consciousness from impunity to accountability. Increasingly, we are paying careful attention to the implications of what we buy.

It's more than the Great Recession that's behind this. We're looking at the long, winding cascade of effects from every purchase decision we make, from the carbon footprint of the jetted-in New Zealand lamb we buy, to the enviro-complexities of bottled water. Some of us are seriously taking up President Obama's charge to take responsibility for our health. And younger consumers will rally to these efforts in numbers that are going to surprise everyone.

Of course, there are contrarians rattling around. Newsweek has a piece this week which argues that personal responsibility is over-rated, that a tax on behavior is wrong-headed, that we need to focus on income and education to create a healthier population.

From where I sit, though, the risks are great for the companies in the sugar-flavored water and sugar-flavored processed wheat business. I wouldn't be surprised at all if local sugar-and-fructose taxes start appearing in city after city, as one politician after another races to jump on the bandwagon.

Americans like to point the finger, and never at ourselves. Americans love an enemy, even if we once wanted to buy the entire world a bottle of it. We are frustrated and angry and need our daily demons.

So for Coke, the early warnings from Gavin Newsom and the New England Journal could very well be the Real Thing.

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