On the 8th of November, 2016, Americans voted in a presidential election that can be described as “memorable”. On that same day, four specific cities also voted on an issue that was not quite as memorable: a tax on soft drinks. Hillary Clinton was not the only one to suffer a demoralising defeat – the soda tax passed in every city, and the people of Coca-Cola and Pepsi-Co were crushed.
In the Californian cities of San Francisco, Oakland, and Albany, as well as in Boulder, Colorado, democracy spoke and the people agreed to either a one or two cent tax per ounce on sugary beverages. In the aftermath of that election, many people came to believe they were living a nightmare, and none more so than the American Beverage Association. People were voluntarily voting in favour of an extra tax on their product. In the world of goods and services, it doesn’t get any worse than that.
This didn’t come around suddenly. The American Beverage Association had been fighting the war on soda tax for years, and with great success. The issue first came up in 1914, although then the tax was linked to the First World War. The first health-related sugary drink tax was proposed in 1994, and it wasn’t until twenty years later that the soda industry suffered their first genuine loss.
In November 2014, Berkeley, California passed a penny per ounce tax on soda. Consumption plummeted by 21%. Until this point, the effects of a soda tax had been largely speculation. No one really knew how much it would affect the health of Americans, and three years later, no hard evidence of any effect on obesity has emerged. The only health benefit that seems to come from soda tax is that people drink less soda. Only one outcome was certain to arise from taxing soda: the soda industry was going to suffer.
Soda corporations doubled down on their efforts to fight soda taxes, and Berkeley remained the only city in the US with a soda tax. The fights had been easy up until this point. Somewhat unsurprisingly, Americans are divided on soda tax, but this division differs from the divisions that seem to exist in the US on every other issue. In the case of soda tax, there are equal amounts of young people, old people, liberals, conservatives, men and women coming down on both sides of the issue.
The tax was hard to pass and easy to fight. Then, in 2016, the soda industry found an unlikely new enemy: a newly elected Philadelphia mayor named Jim Kenney. Kenney had gotten himself elected by promising the city of Philadelphia free pre-kindergarten, and now he was in office with no way to pay for it. He proposed a soda tax.
It was the third time in under ten years that a soda tax had been suggested to the people of Philadelphia, but the landscape of the battle had changed. The soda tax hadn’t produced the health benefits that had been expected. It had produced a lot of money for the city of Berkeley. Kenney reframed the soda tax pitch. It was no longer about health, about the nanny state forcing everyone to drink less soda and pay more for indulgences.
For Kenney, it had never been about health. It had always been about pre-kindergarten. Suddenly, a voluntary tax made sense. This was what the people wanted. It was how Kenney got elected. Soda tax was in, and more worryingly for Big Soda, the model on how to pass the tax had been found.
That was the lie of the land last year, when the per-ounce taxes were being proposed in Colorado, San Francisco, Oakland, and Albany. The soda companies had seen the tax devastating their revenue in two cities. They needed to contain the spread. They had what their opposition wanted: money. Now they really started spending it. In 2014, the American Beverage Association spent around $1.2 million fighting the tax.
Up until that point, fighting the various soda taxes that popped up around the country was just a going expense on their books. After all, various cities and states had tried to pass soda taxes forty times, with no success until 2014. In 2016, they spent $30.8 million, mainly on bizarre and misleading advertising claiming that the soda tax was “condescending” and referring to it as a “grocery tax,” insisting vendors would spread the tax over all food and drinks.
They put these advertisements everywhere in print and local news, even running them in cinemas before movies. They were outspending their opponents by a ratio of over 2:1. They still lost. In the period since the 2016 election, two more counties have adopted the soda tax.
This was just the American Beverage Association’s latest move in a long history of misleading the public. To the food and beverage industry, scientific evidence that the product is healthy is good advertising. It doesn’t matter if the science is weak once it can form a good headline. Every part of the food and drink industry is overwhelmed by bogus health claims, from coconut water, which is no more hydrating than regular water, to strange claims that gluten-free diets give you more energy.
It’s a little more difficult for anyone with sugar in their product. They have the opposite concern. Every time a study on their product comes out, sales take a hit.
Once again, when facing adversaries in the form of scientific research, the American Beverage Association has something researchers do not have – money – and no one anywhere in confectionary has as much money as Coca-Cola. Coca-Cola have perfected the art of covering up unflattering facts about sugar. They started covering things up under the umbrella of the sugar industry over fifty years ago, when they managed to reshape the narrative on the causes of heart disease. A study with a very clear and damning result was published: sugar and saturated fat cause heart disease. The Sugar Association had to act fast. They formed the Sugar Research Foundation.
The Sugar Research Foundation promptly dropped roughly $50,000 on some top Harvard researchers, who in turn stated firmly that saturated fat was the main cause of heart disease. The plan worked. The Sugar Research Foundation distorted health information, adversely affected public health and kept sales up, all for the bargain price of $50,000. They perpetuated a myth that sugar was harmless empty calories that might cause some tooth rot if you didn’t brush your teeth. It was so effective it inspired a lifetime of these dirty tactics, with varying degrees of success.
Coca-Cola was so adept at misleading the public that they were single-handedly funding a government-run operation called the Global Energy Network Balance (GENB). The stated function of the Global Energy Network Balance was to focus on physical activity as a solution to the growing obesity problems. Its implicit function was to redirect attention away from a healthier diet, which would have a far greater impact on obesity.
In 2015, the GENB’s funding source was revealed by the New York Times, causing a minor scandal. The organisation was disbanded, and Coca-Cola were offered the chance to fund a neutral government initiative. They respectfully declined. Coca-Cola responded to the scandal by making their sponsorships for the previous five years transparent. $100 million going to various health groups and $21 million to scientific researchers. Coca-Cola are giving money to any health organisation that will take it.
Out of 468 groups taking Coca-Cola money, 96 were in a definite ethical grey area. The American Academy of Family Physicians, the American Academy of Paediatrics, the International Food Information Council, the American Red Cross, the American Cancer Society, and the American Dietetic Association were all taking millions of dollars of Coca-Cola’s money. All being swayed, however subliminally, not to speak out against soda. A lot of good work can be done with that money. Nobody in an underfunded research institute can afford to forget that. The system works. If an organisation was on Coca-Cola’s payroll, they were 36 times less likely to link obesity with soft drinks.
Over a century ago, Coca-Cola itself was born from medical research. It was invented to cure morphine addiction in the nineteenth century, and by the time it was widespread it was sold as a miracle cure for many maladies. Headaches, nerve disorders and impotence could all be set right by a glass of Coca-Cola. Eventually, genuine medical research caught up with Coke, but the drink stuck around. The business model was good.
Soda was cheap to produce, it tasted good, and it was not yet seen as unhealthy, even if it no longer cured impotence. Everyone in the Coca-Cola production line was making money. During the Second World War, the Coca-Cola Company would send a bottle of Coke to a soldier, anywhere on earth, for a nickel. The Second World War was a golden marketing opportunity for them, and they capitalised. Coca-Cola became a globally dominant brand.
Fifty years later, things are beginning to break down. A lifetime of lying and cheating is catching up with Coca-Cola. Sales are falling, taxes are passing in America, and catching on across Europe. The introduction of the sugar tax in Ireland makes it the seventh country in Europe to adopt such a tax. The spread of sugary drink taxes has doubtlessly been slowed by years of misinformation.
There’s been no evidence to suggest that sugary drink tax has any impact on obesity. However, we do know for sure that sugary drinks negatively impact health in a wide variety of ways. We also know that taxing soft drinks means people drink less of them. The facts still work against soda. Luckily, it still tastes pretty good.