This is a transcript of the Gastropod episode Dirty Tricks and Data: The Great Soda Wars, Part 2, first released on December 18, 2018. It is provided as a courtesy and may contain errors.
TAX PROPONENT: Got the measure passed! Not only passed, but with 75 percent of the voters. Yes!
TAX OPPONENT: I think it’s absolutely outrageous. It’s not going to change anybody’s drinking or eating habits. If anything, I know me personally, I’m going to stock up on all my sugary drinks before January 1.
NEWSCASTER: The measure won by a wide margin. It requires distributors of soft drinks and other sugary beverages to pay a tax of one cent per ounce.
TAX PROPONENT: Also, I feel that this is going to have an incredible statewide, first, and then definitely national impact
TWILLEY: This, dear listeners, is where we left you last episode. In the city of Berkeley, California—which is the city where Cynthia and I first met!
GRABER: Ah, the memories. But today, we’re not going to stroll down that particular memory lane. We’re going to stick to the soda lane today.
TWILLEY: So: we’re in 2014. Berkeley has passed the nation’s very first modern soda tax. Some people are already planning to hoard the sugary stuff. And others are saying this is the start of a wave.
GRABER: So, was it? Did other cities, even countries, catch that wave? This is part two of The Great Soda Wars. You’re listening to Gastropod, the podcast that looks at food through the lens of science and history, I’m Cynthia Graber.
TWILLEY: And I’m Nicola Twilley. And this episode, we’re going to get to the bottom of the real question: Do these soda taxes work? But also what does “work” even mean, in this context?
GRABER: And why did the soda industry take the entire state of California hostage last summer? What was going on?
TWILLEY: Not to mention their dirty tricks campaign in Colombia.
GRABER: We are actually going to mention that, Nicky—thanks for bringing it up.
TWILLEY: My pleasure. Finally, are soda taxes the best bang for the buck? Are *they* the best way to cut sugar consumption and all its related health impacts?
GRABER: All that and more.
BARRY POPKIN: Well, we actually began in Mexico around 13 or 14 years ago.
GRABER: Barry Popkin is an economist and nutritionist at UNC Chapel Hill. But his work actually extends around the world. He consults with countries—such as Mexico—about policies that can help improve public health, policies like soda taxes.
TWILLEY: As we just said, in the U.S., the first soda tax to pass in modern times was in Berkeley, in 2014. But in fact, an entire country had passed a soda tax just before that, in 2013. Mexico.
GRABER: Countries other than Mexico have had soda taxes here and there.
TWILLEY: Most of them were small taxes, passed for revenue reasons rather than health. But some of the Pacific Islands—Nauru and French Polynesia—they had passed soda taxes to try to reduce consumption back in the 2000s.
GRABER: But the reason we’re going to focus on Mexico is, well, first, because they’re our neighbors. And they’re a larger country than the Polynesian islands. But also because Mexico was dealing with a serious health crisis. People had been gaining a lot of weight.
TWILLEY: When Mexico joined the North American Free Trade Association—NAFTA—in the 1980s, soda flooded across the borders. And obesity has tripled since then.
GRABER: The Mexican government was in a panic. Diabetes was becoming a national threat. The World Health Organization reported that diabetes had become the number one cause of death in the country.
TWILLEY: So the Mexicans called Barry.
GRABER: It was tough—the Mexican government, working with Barry, they had to get everyone on board, and they had to do it while combating the efforts of the soda industry. But they succeeded. Mexico got a tax, roughly a ten percent soda tax.
TWILLEY: That was smaller than Barry had hoped but it was still significant, particularly in a middle income country.
GRABER: Barry wanted to see a bigger tax passed, because he thought it’d have a bigger impact. And that was what was about to happen in Philadelphia.
PHILADELPHIA CITY COUNCIL PRESIDENT: Ayes are 14, nays are 4.
NEWSCASTER: And with that, Philadelphia became the first major city to have such a tax.
TWILLEY: That’s right—on their third try, Philly became the largest city in the U.S. to have a soda tax.
NEWSCASTER: Mayor Kenney says the 1.5 cent per ounce beverage tax will generate $386 million over 5 years.
GRABER: This 1.5 cent per ounce tax was the highest in the U.S. to date, and it went into effect at the beginning of 2017. That might not sound like a lot, but here’s how it works. Because it’s a per ounce tax, a 16-ounce plastic bottle will only cost you an extra quarter, no big deal. But a two-liter bottle? That’d cost another full dollar.
SARA BLEICH: So one thing that happened early on in terms of industry effort is Pepsi decided that they wouldn’t sell anything larger than a 1 liter bottle within the city of Philadelphia.
TWILLEY: Sara Bleich is a public health researcher at Harvard.
GRABER: And what’s interesting about this move from Pepsi is it’s a cool side effect from the tax—it also ends up being sort of a portion cap, like what Mike Bloomberg wanted to get passed in New York.
TWILLEY: So this is all a big success! But for public health advocates, it has been an uphill struggle—for every place where a soda tax has passed, it seems as though there’s at least one that’s failed or been repealed, like in Chicago. But there is progress.
POPKIN: We now have 39 countries with sugary beverage taxes, along with cities and counties in the U.S.
GRABER: So now, we have all these soda taxes. Mexico’s and Berkeley’s have been around for a few years, Philly’s been in place for coming up on two years. So it’s time to take a look at all those dire warnings you heard last episode.
TWILLEY: All the terrible things that the industry and people opposed to the taxes predicted would happen. Remember?
SPENCER MICHAELS (PBS NEWSCAST): In a statement provided to The News Hour the beverage association called the proposed Richmond tax regressive and added it disproportionately hurts the most, those who can least afford it.
GRABER: Spencer Michaels reported on soda taxes for News Hour a few years ago, and he heard all the complaints.
MICHAELS (NEWSCAST): People don’t support soda taxes, don’t believe they’ll reduce obesity, and don’t trust these taxes will go to pay for childhood obesity programs.
MOHAMMED EL ZULFRI (NEWSCAST): This will just hurt the poor people and hurt the business owners like myself.
CORKY BOOZE (NEWSCAST): It’s unfair to people who are basically don’t have the means of getting out of their neighborhood store to go into the neighboring communities to be able to avoid that tax.
TAX OPPONENT (NEWSCAST): If the cost is absorbed by the distributors that ends up doing nothing to deter people using these products as the proponents would claim. And therefore what’s the point of them even passing this kind of law?
TWILLEY: Whew. A lot of doom and gloom, some of it contradictory—like, if it isn’t going to work then it can’t really be unfair. So it seems like we need to break this down a little. Did the bad things happen? Did any good things happen? Do we even know?
GRABER: Well, scientists are starting to study it. It’s early days, there’s a few years of data in a few places.
KELLY BROWNELL: So it shouldn’t be too long until we have a very robust set of studies that will show what the impact of taxes will be. But the results so far look pretty good.
TWILLEY: This is Kelly Brownell, director of the World Food Policy Center at Duke University. He’s one of the scientists analyzing all the data now that these taxes exist in the real world.
GRABER: So now we’re going to go through this, argument by argument, and let the scientists say what they’ve been learning. Argument number one: People will drink just as much soda as they did before the tax, so there’s no point in a soda tax.
BLEICH: And so, you know, why put this tax in place that’s going to have no effect on people’s behavior? But there’s a lot of empirical evidence—from Berkeley, coming out in Philadelphia—that taxes do work and that they are having the desired effect, which is trying to get people to purchase fewer sugary beverages with the end goal of reducing obesity risk.
BROWNELL: Now in Mexico we and others were a little worried that the size of the tax was too small to affect consumption. So we were worried there wouldn’t be any change or it would be so small nobody would care about it. But in fact the change in soda consumption was greater than expected and people seemed to switch primarily to water.
BLEICH: What Mexico found is that after about two years that they think the decline was about 10 or 11 percent with higher declines among vulnerable populations.
TWILLEY: And it’s not just Berkeley and Mexico. Everywhere there is a soda tax, scientists have seen drops in soda consumption. In Philly, the results were dramatic—a 57 percent drop in soda purchases. And like Kelly said, people seem to be substituting water for that soda, rather than, I don’t know, beer or pumpkin spice lattes.
GRABER: Okay, so, great, it looks like people have cut a lot of sweetened drinks, especially in Philly. But maybe everyone’s just buying their sodas across the border, outside the city limits? Sara says that’s what everyone predicted, that people would just drive somewhere that doesn’t have a tax to get their soda fix.
BLEICH: What we’re seeing preliminarily in Philadelphia is that it exists but it’s not huge.
TWILLEY: Researchers call this kind of tax avoidance leakage, which is an unfortunate term. And leakage is an issue with cigarettes. But not so much with the sodas.
POPKIN: In general, these are very large volume products. We don’t see so much smuggling and leakage like we were with cigarettes, where smuggling is a big problem from area to area and country to country across the globe.
GRABER: Yeah, people aren’t lugging many two-liter bottles across city lines. But then what the argument about jobs?
BLEICH: So one of the biggest ones is it’s going to put stores out of business and because it puts stores out of business employees will lose their jobs. That does not seem to have borne out in Berkeley or Philadelphia, although the data is still coming on those.
TWILLEY: Same in Mexico—Barry says that from the data so far, it hasn’t been an issue.
POPKIN: We saw no changes in overall employment. We saw no changes in what happened in the retail sector. It’s just people shifted to other products. And so—and they were healthy products in the case of Mexico.
GRABER: Sara says there’s one industry-funded study that did show that there were, like, a thousand jobs lost in Philadelphia.
BLEICH: But they essentially took all the jobs that were no longer happening because beverage taxes have been put in place and just threw them out. as opposed to re-purposing them. Maybe someone moves from a bottler to retail or maybe someone moves from a store to a clothing store. But they’ve sort of pulled them out of the model and as if to say they no longer existed.
TWILLEY: Once again, the moral is: industry-funded studies tend to find results that support industry arguments
GRABER: So the hit to retail and jobs—it’s a tricky one to measure, but so far the evidence is that, nope, business is not really taking a hit. But now onto the really important question. Do soda taxes make a difference for people’s health?
TWILLEY: This is what I want to know: this is what the question of whether a soda tax actually works means to me. Do soda taxes reduce obesity?
POPKIN: You can’t expect to see an immediate change in overweight and obesity.
GRABER: This is actually obvious if you think about it—it’s not like you put the tax in place, people drink less soda, and the pounds immediately fall off. Scientists have to model the impacts, they have to project it into the future on maybe a ten-year time scale. They can’t see it happening now, these impacts take a while to play out.
TWILLEY: But even then, the projections—they’re not actually predicting a big drop in obesity from the taxes.
POPKIN: We expect to see a shift to less BMI at each point in the population distribution.
GRABER: This sounds a little complicated, but what it means is that, on a population level, everyone will lose just a little bit of weight. Overall, Barry and his colleagues say that translates to obesity dropping maybe one percent.
TWILLEY: That seems tiny. Like, why bother?
GRABER: Well, they say that what seem like small changes in BMI and small reductions in obesity, they’ll still have a really important health impact in the future.
TWILLEY: After all, if you’re obese and you drink less soda because of a tax, your BMI will likely shift downwards and your health will likely improve, but you might still be classified as obese. So that doesn’t register as a reduction in obesity, but it’s still a win from a health point of view.
GRABER: In fact, when researchers projected what kinds of health effects they should see over the next decade, they say tax will prevent hundreds of thousands of cases of diabetes, tens of thousands of strokes and deaths. They also predicted that it would save Mexico nearly a billion dollars in health care costs. In just ten years. Again—small shifts, big results overall.
TWILLEY: But the real health benefit—it’s preventing future cases of obesity, especially in kids. That’s where these taxes will have their biggest effect. Steve Gortmaker is at Harvard, where he specializes in modeling the impacts of soda taxes. And of all the health benefits, he’s most excited about prevention.
GORTMAKER: Children aren’t born with obesity, they develop it over their early life and childhood and adolescence. And our feeling is that if you really want to make a dent in the future, you’ve got to begin young, every single year. There’s nothing magical about any particular year. You just got to slow that rise every single year. Once adults have obesity, it’s very hard to turn around. It’s not that it’s impossible. And some people really are successful at turning that around. But we just would like to see a more of a preventive focus.
GRABER: And this is the real point of soda taxes. Preventing future cases of obesity.
TWILLEY: Reducing obesity in the future is obviously good—but what about the argument that these taxes are a regressive way to achieve that goal? This is the argument that soda taxes hurt the poor the most, and that’s unfair, because the poor aren’t responsible for the inequalities and failures in our society that underlie obesity. So why should they be punished with a tax?
GRABER: In Mexico, the people who drink the most soda are among the poorest. And while overall, Mexicans reduced soda consumption by about ten percent, the poor reduced their consumption by nearly twice that.
BLEICH: It looks like where it’s having the biggest effect is among low-income populations. It’s the same story in Berkeley where researchers out there looked at consumption pre-/post- tax and found larger drops among low income populations.
TWILLEY: And those larger drops in consumption, they translate into larger health benefits. So, in that sense, these soda taxes are actually quite progressive—the poor are getting the biggest health benefits. And, according to Steve Gortmaker’s modeling, soda taxes are also not hurting the poor financially—because they’re reducing consumption rather than paying the tax.
GORTMAKER: With a tax they’ll tend to spend less of their money on the beverage after the tax. I mean, even taking into account the tax.
TWILLEY: Well okay. Based on the data so far, the case seems closed. We should just implement these soda taxes everywhere. Why haven’t we already?
GRABER: Well, as we’ve mentioned, the soda industry isn’t really excited about all these taxes. Especially because they do seem to work and people drink less soda after the taxes kick into gear.
TWILLEY: They’re fighting to stop the spread of soda taxes, and we’re going to tell you about some of their dirtiest tricks in that fight next.
GRABER: So, again, the soda industry has fought tooth and nail to keep soda taxes off the law books. In the eight years after Kelly Brownell’s anti-soda-tax op-ed, the soda industry spent more than a hundred million dollars just in the U.S. to oppose these taxes.
TWILLEY: But here’s the thing. Soda sales have actually been going down in the U.S. for a while.
GRABER: And, as you probably know, rates of obesity have still been increasing in the U.S.
TWILLEY: The soda industry actually uses this as an argument. Look, they say. It can’t be our fault that everyone is obese, because even when Americans are drinking a little less soda, they’re still getting fatter.
GRABER: It’s true, and it’s true that soda isn’t the only reason for the growth of obesity in the U.S. and elsewhere. But it’s also true that when people who drink a lot of soda cut out that soda, on an individual level and on a population level, they do lose weight. And soda taxes have been proven to help with this.
TWILLEY: So that particular industry argument is also spurious. But the point is, because of that dip in sales here in the US, Coke and Pepsi have been making up for that by boosting their sales overseas, particularly in lower-income countries.
GRABER: According to the Center for Science in the Public Interest, Latin America is now the largest market for soda companies in the world in terms of the value of the sales. The companies have really been focusing their advertising efforts there.
TWILLEY: And if you think they’ve been fighting soda taxes hard in the U.S.—well, you haven’t seen what they’ve been doing in the rest of the world.
ESPERANZA CERÓN (TRANSLATED FROM SPANISH): My name is Esperanza Cerón. I’m a doctor and I’m currently in charge of an organization called Educar Consumidores, Educate Consumers.
GRABER: Esperanza lives in Bogota, in Colombia. And that is where we are going now for the next battle in the soda wars. Esperanza was involved in a campaign to get a fairly sizeable soda tax implemented in Colombia. The tax was proposed in March of 2016.
TWILLEY: And Esperanza’s nonprofit—they work on campaigns for all kinds of human and environmental health issues, and they put out a TV ad in support of the soda tax.
GRABER: It’s pretty eye-catching. It talks about the rise of obesity and diabetes in Colombia and how sugary beverages contribute to these problems, and why the tax is so important. There’s a graphic moment with an infected foot—this kind of nerve damage can be a consequence of diabetes.
TWILLEY: But the TV channels didn’t play their catchy ad. And they weren’t playing it because the Colombian government ordered it off the air. And the government did that because the soda industry told them to.
CERÓN (TRANSLATED FROM SPANISH): Overnight, the National Authority made us retire that commercial from all television channels, arguing that it was deceitful publicity.
GRABER: Not only did the government force the ad off the air, but Esperanza and her colleagues were legally forbidden from publicly talking about the health risks from soda, and sugar. If they did, they would be fined hundreds of thousands of dollars.
TWILLEY: But industry still wasn’t done. After all, even though Esperanza had been silenced and the ad was censored, the bill introducing a soda tax—that was still under consideration.
GRABER: Enter the lobbyists.
CERÓN (TRANSLATED FROM SPANISH): In Congress, industry had posted one hundred and five lobbyists, not only offering arguments but also resources for the campaigns for the next election. Our team was made up of only five people, competing with 105 lobbyists from the beverage industry.
GRABER: Those lobbyists were quite friendly with the Colombian lawmakers. Apparently they sat right next to them during the committee hearings about the tax. Which is against Colombia’s rules for committee hearings.
TWILLEY: Meanwhile, Esperanza’s nonprofit was still working behind the scenes—they couldn’t talk publicly, thanks to the soda industry, but they were still active. And the soda industry didn’t like that.
CERÓN (TRANSLATED FROM SPANISH): When we were close to the bill’s approval, in the last two months, we began to see people around our office, taking pictures. Our computers and email accounts were hacked. Our mobile phones were hacked. And between October and November, I received a number of threatening calls, demanding I stay silent. First these were just phone threats. And then it happened in the street, while I was walking, someone going by in sports clothing pushed me and told me I should stay silent or face the consequences. And there were two times that people on motorcycles approached me when I was in my car, and they knocked hard on my windows, on both sides, saying the same thing — rudely telling me that I should stay silent. It was really terrifying.
GRABER: Esperanza went to the police, and they suggested some things she could do to protect herself, but they didn’t pursue the case themselves.
CERÓN (TRANSLATED FROM SPANISH): We cannot prove, we cannot say for sure that it was the soda industry. But it was the only thing that I was doing that year, that we were doing that year. I was exclusively talking about the soda tax that entire year, and the damage that sugar and soda can cause to our health. There was no other thing I was talking about publicly.
TWILLEY: The New York Times published an article about Esperanza’s experience fighting for a soda tax in Colombia. They reached out to the soda companies, which said they were not involved in the attacks and harassment. And the Colombian authorities declined to comment.
GRABER: But even after ordering the ad off the air and silencing Esperanza and here colleagues and even with all the cozy lobbying, the soda tax had gotten a lot of support and it looked like it was going to pass. But—last minute—almost the last day of the year on December 30th, 2016, congressional opponents of the tax stuck that tax in with a big bill that was certain to get voted down. And it did. No tax.
TWILLEY: A couple of months later, a court overturned the ban on Esperanza’s nonprofit talking about the health effects of sugar and soda. So, although, she lost the tax battle, she’s still fighting.
CERÓN (TRANSLATED FROM SPANISH): We cannot stop, because, look, we lost in Congress, but we won in civil society. Wherever we go, people are more aware, or are becoming more aware, of the negative health effects from these products. And this is something entirely new in Colombia, it was never discussed before we started our campaign. So this is an enormous gain for civil society.
GRABER: Lest you think this is just a story about underhanded tactics in a country fairly far away and one that doesn’t have as strong a civil society as we do here in the U.S., we have another story for you.
TWILLEY: From my home state of California.
NEWSCASTER: A stunning power play at the state capitol—lawmakers caved to big soda with a special deal that bans future taxes on sugary drinks. You could call it a kind of a soda shakedown.
BLEICH: So in California essentially the way that it’s often described in the press is that the legislature and the governor were essentially held hostage.
GRABER: Let’s talk about California. California is the home of a lot of progressive initiatives at the city and state level. And soda taxes were going pretty well at the city level.
TWILLEY: As you’ll recall, the very first modern soda tax in the United States was passed in Berkeley, California.
GRABER: And then other Bay Area cities followed—San Francisco, Oakland, Albany. And yet other cities had a soda tax on the ballot, like the state capitol of Sacramento.
TWILLEY: California had more soda taxes than any other state already, and the trend seemed to be catching—cities all across the state were joining the soda tax fun. But the soda companies were not going to let this happen without a fight.
GRABER: They spent millions of dollars to get an initiative on a statewide ballot. It’s something anyone can do in California, if you have a spare seven million dollars lying around to spend on getting hundreds of thousands of Californians to sign a petition. And this was what their initiative said: local communities will not be able to raise any new taxes without getting the approval of two-thirds of the voters or elected officials, instead of a simple majority. State Senator Scott Weiner and Assemblyman David Chiu were interviewed by the local CBS station.
SCOTT WEINER (NEWSCAST): This measure would have required every tax to be a two thirds vote. No matter what.
DAVID CHIU (NEWSCAST): Which could literally jeopardize billions of dollars of city and state services around California.
TWILLEY: Every new tax. That means new taxes to pay for police or firefighters or transit or parks or homeless shelters or schools or any of the kinds of things that we frequently get asked to vote for tax increases on here in California. Side note, voting in California takes a couple hours, no joke—we vote on everything. This year we had to vote on whether dialysis center workers had the right to unionize and whether EMTs should be forced to respond when they’re off duty.
GRABER: It is really hard for voters to be totally up to date on what all these initiatives might actually mean in reality. So maybe a lot of people would have thought, hey, why not get a two-thirds majority for any new taxes, and they wouldn’t have thought about how hard it would make it to raise money for all the government services they need and use regularly.
TWILLEY: So the soda industry gets this on the ballot. Every government official in California has a heart attack. Then the soda peeps send a nice letter to the California legislature saying, hey, we’ll take this off the ballot—if you pass a statewide ban on any new city-level soda taxes for the next 12 years.
SCOTT WIENER (NEWSCAST): This industry is aiming basically a nuclear weapon at government in California and saying if you don’t do what we want we’re going to pull the trigger and you are not going to be able to fund basic government services.
DAVID CHIU (NEWSCAST): This was a tactic of political extortion.
NEWSCASTER: In his signing message, the governor called the ballot initiative an abomination and wrote that he was only signing the law because it was in the public interest.
GRABER: It does frankly seem a lot like blackmail.
BLEICH: I mean, essentially, I think that is what happened. I mean if you if you ask the legislators did they want to make that choice? It doesn’t sound like they do. But it also doesn’t sound like they had much of a choice in the process. So I think it was a very—I mean, it was checkmate. It was a very effective strategy by the American Beverage Association.
TWILLEY: Straight away, places like Sacramento that were working toward getting a soda tax passed—they stopped. So it was a huge win for the soda industry.
BLEICH: And the fear from the public health perspective is that we’re going to see more state preemption.
GRABER: And, actually, that’s just what happened. Washington State voted to ban any future city-wide soda taxes, also this year. As Sara said, this tactic is called preemption. They’re preempting future local taxes.
TWILLEY: And preemption has actually been a tactic in the soda industry playbook for a little while now. Since 2008, 14 states have passed laws preempting local food and nutrition policies. And on top of that, 26 states have passed something called a Commonsense Consumption Act, which bans any future lawsuits against the food industry for obesity related claims.
GRABER: This is unbelievable. And shockingly underhanded.
TWILLEY: I mean could there be a more clear admission of guilt from the soda companies, just purely by how hard they’re fighting and how low they’re going.
GRABER: What’s even more interesting is that the soda industry is not inventing these tactics itself—the marketing, the lobbying, the pre-emption, supporting scientific research that muddies the issue—even the intimidation. They are taking these strategies straight from Big Tobacco’s playbook.
TWILLEY: We actually interviewed Cristin Kearns about this—she’s the founder of a new archive of internal food industry documents at UC San Francisco. We talked to her about how you can use these documents to trace direct lines between the two industries and how they fight regulation.
CRISTIN KEARNS: And I think that public health, the public health community who is out there trying to implement policies and programs to reduce sugar consumption, they need to know what they’re up against.
GRABER: But we’ve had to save the rest of Cristin’s story about her discovery of hidden food company documents, and how they’re tied directly to big tobacco—because otherwise this episode would last forever. So, we’ll tell that story in our special supporters email.
TWILLEY: We’re saving Cristin’s story because we want to get to our next question, which is: are soda taxes the most effective tool we have to cut sugar consumption and improve public health?
GRABER: So for nearly two entire episodes, we’ve been talking exclusively about soda taxes. They’re great. They work—they cut sugar consumption, they help reduce obesity and diabetes. Wonderful.
TWILLEY: But, of course, just cutting soda consumption using soda taxes—that’s not the only way to achieve these end goals. In my home country, the UK, there’s been a slightly different approach.
BRIGGS: So back in 2016 our Chancellor of the Exchequer, so our finance minister, in effect announced that he would introduce a tiered sugar sweetened beverages tax. So that meant that there are different levels of taxation based on how much sugar was in the drink.
GRABER: Adam Briggs is a doctor who studies public health at Oxford University.
TWILLEY: So you might be thinking, well, what’s so different here. It’s a tax. You’ve told us about taxes.
GRABER: So the way the British tax works is that if your drink has a lot of sugar, it’s taxed at a high level. If it has somewhat less, it’s taxed at a medium level, and if there’s only a little bit of sugar, it’s taxed at a low level. There are three different levels of taxes.
BRIGGS: And the interesting thing about the tax system that he announced was that it would be introduced after a two year lead-in period. And he said the explicit intention of that was to allow industry to reformulate product or change their products such that they can reduce their potential tax liability.
TWILLEY: And the idea of having these three tiers and the two year run up to the tax—it wasn’t just to make life more complicated. Like Adam said, the whole thing was explicitly designed to encourage beverage companies to take that two years and figure out how to reduce the amount of sugar in their products so they wouldn’t get taxed at the high level.
GRABER: Okay. So we were wondering—is there any data showing that this approach would work?
BRIGGS: Well, we don’t really have any. Which is why it’s interesting.
TWILLEY: Yep, the UK is the guinea pig in this example.
GRABER: Nobody else in the world has ever done it before.
TWILLEY: So when the Chancellor of Exchequer announced this in 2016, Adam and his colleagues were intrigued. They wondered how the soda industry would actually respond. They figured there were three things that could happen: soda companies could just opt to sell smaller containers of drinks—so there’d be less sugar in each container, so it would get taxed less.
GRABER: The second option they modeled in their study? The companies wouldn’t do anything. They’d get taxed, and they’d raise the price of their drinks accordingly. It’d be like a regular soda tax.
TWILLEY: Scenario number three was what the Chancellor said he wanted to happen, which is reformulation. Meaning that the soda companies would reduce the sugar in their products to go down to a lower level of tax.
BRIGGS: Of our three categories of scenario that we modeled, we found that this reformulation we felt would be most likely to have the biggest positive health impact.
GRABER: That’s right—Adam predicts that reformulation would have a bigger health impact than the flat taxes that get people to drink less soda.
TWILLEY: After the two-year run up, the law went into effect at the start of this year. So … what happened in reality?
BRIGGS: So I am part of a team that’s independently evaluating the soft drink tax here and our data are thus far preliminary.
GRABER: But one thing Adam could tell us is that option three won. The soda companies mostly used that two-year ramp-up to change their recipes and lower the amount of sugar in their sweet drinks.
BRIGGS: And these are not small companies. This is things like Lucozade and Ribena and Irn-Bru which are manufacturers of very popular soft drinks over here in the UK.
GRABER: I haven’t heard of any of these companies. Nicky, how big a big deal are they in England?
TWILLEY: Yes, they are real. Ribena is a super popular blackcurrant cordial. I feel like it’s like ketchup—everyone has a bottle at home. Irn-Bru is basically Scotland’s other national drink. It’s bright orange and it tastes… well, fizzy and sweet.
GRABER: And Lucozade? That sounds like medicine.
TWILLEY: That’s funny—my Mum actually used to give it to me when I’d been sick. It’s basically our Gatorade.
GRABER: Okay, so these companies now sell their drinks with less sugar. They’ve all added artificial sweeteners to replace some of that sugar.
TWILLEY: This has made lots of British people very unhappy because the taste of their favorite drinks has changed. And while reformulation definitely reduces the calories in a drink, it does raise some other issues—like about the health impacts of the artificial sweeteners themselves.
GRABER: Which we are going to come back to early next year. So stay tuned.
TWILLEY: So Adam and his colleagues are still collecting data, which means that the jury is still out on whether a tiered tax is more effective than a flat tax.
GRABER: So what’s going in England, that is another kind of a tax. But there is an entire other way to approach the question of how to help people cut some sugar from their diet.
POPKIN: We started working with our colleagues in Chile and the Chilean government actually quite a long time ago.
TWILLEY: This is Barry Popkin again. He’s kind of the go-to guy for a government that wants to try to cut sugar consumption. He worked with Mexico on their soda tax. And then Chile picked up the phone.
GRABER: So Barry and the government of Chile—they all came up with a new approach to combating obesity and diabetes. It’s includes soda—but it also encompasses all the other junk food that folks are eating.
TWILLEY: Chile already had a small soda tax—too small to make much of a difference, Barry said.
GRABER: So now, the main new tools they’re using are these bold, black stop-sign shaped warning symbols that are printed on the front of food and drink packages. One stop sign if the food has a lot of fat in it, a second if it has a lot of sugar, and a third black stop sign if it has a lot of salt.
TWILLEY: So at this point you might be thinking big whup, what’s so exciting about labels. We have labels on our food. We can read exactly how many grams of sugar are in our sodas.
GRABER: But that doesn’t seem to stop anyone from drinking them. As Sara said, we get confused by these numbers, we don’t know what they mean, we don’t know how many calories we’re supposed to eat or how many we’ve already eaten.
TWILLEY: Lots of countries have other kinds of labels—often positive labels like ones that say “healthy choice” or “low in fat.’ Most of these label systems are voluntary. And most of them have relatively tiny effects on people’s consumption and thus people’s health. In fact, industry tends to like these kind of positive labels for exactly that reason.
GRABER: So instead, Chile went dark. These mandatory negative front labels, this is something that had never been tried before.
POPKIN: Never in the world.
TWILLEY: But wait, there’s more. It’s not just that soda and other sugary foods now have these black stop signs on them. It’s what you can do once you have them labeled.
GRABER: Like—ban marketing of those foods to kids.
POPKIN: So this summer Chile started a complete ban on marketing. So if your product has a warning logo, you cannot advertise it any time between 6:00 a.m. and 10:00 p.m.
TWILLEY: Foods and drinks with the warning label can’t be brought into schools. And food and drinks with the warning label—they also can’t have fun characters on their packaging.
GRABER: Of course, the soda industry fought this move—they fought it all the way to the World Trade Organization. But they lost.
TWILLEY: So Chile actually won this battle. But are they winning the war? What effect has the Chilean stop sign system actually had in terms of cutting sugar and improving public health?
POPKIN: So it’s very big. That’s all I can tell you. It’s much bigger than the tax. But that doesn’t mean we don’t need both. We need both.
GRABER: This law kicked in about two and a half years ago. And Barry is still studying the results, that’s why he can’t give us many details. But he’s really excited about this Chilean program. Even more excited than he is about what’s going on in Mexico or in Philadelphia.
POPKIN: Yes. I think Chile will become the first country in the world to reduce the prevalence of obesity. I think it will take five or eight years, but I think and I’m predicting—up to now no country, zero countries in the world have reduced obesity and overweight levels. Chile will become the first one.
TWILLEY: This is gobsmacking. Everyone told us that it was almost impossible to significantly reduce obesity—that prevention was the goal, but actually reducing obesity? How? What is it about Chile’s plan that is so effective?
GRABER: Well, one thing that happened is that, just like in the UK, industry changed the recipes of their products. They reformulated.
POPKIN: And they made huge changes. For example we had Fanta. It had a high amount of sugar in it. All of a sudden they added Fanta Zero to the market. And then a couple of months later they they cut the sugar in the regular Fanta. and the people bought it. But it was a low-sugar Fanta. Industry has enormous potential to do these changes when they’re regulated. They don’t do them until they’re not.
TWILLEY: Barry told us that purchases of the foods and drinks labeled with the stop signs have also gone down, and that kids are seeing way fewer ads for them.
GRABER: The Chilean government has released a lot of ads themselves to help people understand what these stop signs really mean, to help them understand why these foods aren’t good choices. There’s a fun one with a bunch of little kids where the kids are clearly rejecting the foods that have black labels on them.
TWILLEY: And, based on Barry’s research, these ads and the stop signs are working. The kids are learning. He’s done a bunch of focus groups, and he gave us a couple of examples of the kinds of things he was hearing.
POPKIN: One is the mother saying—this happened by five or eight different mothers. We had eight different focus groups of low- and middle-income mothers with children. My son told me I had to stop buying things with these black labels on them, I could only buy healthy food. And the second was her daughter said, Mother, you can’t buy any more packaged food. I want you to buy salads for me for school. The third was the women saying I never knew how much sugar was in these products. Now with these warning labels I know it’s really a lot and I’m stopping buying them.
GRABER: Barry still thinks soda taxes are a great idea. He’s not anti-soda tax. He’s just also pro-warning label. But is one better than the other?
POPKIN: I can’t at this point tell you because we don’t have the kind of data from countries only doing the warning label, so that it would be very hard to answer that.
TWILLEY: What also makes it complicated to compare apples to apples with labels vs. taxes is —how high is your tax? That makes a huge difference to its impact. Cigarette taxes in the US—they’re pretty much at 300 percent. Soda taxes—right now they typically max out at about a 10th of that. Public health researchers think that if soda taxes were at 300 percent, they’d be a lot more effective.
GRABER: But Chile’s experiment has already proven so effective that a lot of other countries are copying it. Israel, Peru, Uruguay, Brazil—and Barry said a lot of other countries are starting to look into it now, too.
TWILLEY: What about here? Could we have a Chilean-style warning label system here?
GRABER: Well, experts think it’d be really hard to do. One of the main points of these labels is to use them to prevent companies from marketing to kids, like banning characters and banning advertisements on TV at certain hours. Kelly says that probably wouldn’t work here—at least in part because of the first amendment. That’s freedom of speech, but lately it’s meant freedom of speech for companies, not just people.
TWILLEY: But Barry, for one, hasn’t give up hope.
POPKIN: We can do it. It will take a lot of political will. We’ll need evidence from countries like Chile and others, so that we can fight industry. We’ll need a government that truly cares about the health of the population and realizes that our health care costs are going to continue until we start eating healthier diet and cut the diabetes, hypertension, and all the other non-communicable diseases that are truly impacting our healthcare costs. So it’s going to be a long battle in the US.
GRABER: But it is a battle we need to fight. Basically, Barry, Sara, and Kelly all say—you do what you can, wherever you are, and you still try to push for the best policies possible.
TWILLEY: A city can’t do a Chile-style negative label or even a British-style tiered tax on its own. So a plain soda tax is the way to go if you’re just working at the city level. It’s horse for courses, to use my favorite expression that no American seems to understand.
GRABER: Nicky, what does that even mean?
TWILLEY: Choose your thing to suit the conditions. Like a horse that’s good at jumping for a steeplechase.
GRABER: I’ll keep that in mind. And actually, Barry and Sara say that we need all the horses.
BLEICH: Reporters always say: Wave your magic wand—what is the one thing? There is no one. There is for sure evidence on a suite of things that are likely to work. And it’s the ability just try to try multiple things in concert and ideally in a sort of complementary way that is going to make all the difference.
TWILLEY: And none of them are going to reduce obesity overnight. And that’s OK. Because the point is the kids.
POPKIN: We’re talking about changing the whole norms of eating and the culture of eating and that’s going to take time. It’s not going to happen in two years or five years. It may happen for preschoolers that we start them and they as they get older eat healthier, but we’re going to have to start now to get the next generation eating healthier.
TWILLEY: We can do this! Just slowly! But there’s hope!
GRABER: But we couldn’t leave you listeners with such a feel-good ending, not when it comes to something like the great soda wars. Because you know that the soda companies aren’t rolling over and saying, okay, fine, now there are taxes and huge black warning labels. They’re still fighting. And now they’re trying with international treaties, like the North American Free Trade Act.
TWILLEY: It’s preemption all over again. Mexico and Canada saw what was happening in Chile with the negative labels and they were beginning to think about doing it themselves—and the American soda industry was so not into that. They tried to put a clause banning negative labels into the new NAFTA treaty, so that Mexico and Canada could never do that.
GRABER: Luckily, they lost that battle. But now the soda industry is trying to put that same ban on negative logos, they’re trying to push it through CAFTA, that’s our NAFTA style trade agreement with Central America. So then no Central American countries would be able to use negative labels.
TWILLEY: In other words, the soda wars continue. But the episode ends.
GRABER: Thank god. As we said, we’re actually going to be continuing this topic—we will be doing an episode all about artificial sweeteners early next season. Where did they come from?
TWILLEY: And are they the wonder product they promise to be — can you really have your cake and eat it all with aspartame?
GRABER: Before we wrap up today, a final thanks this year to some of our special Gastropod superfans who support us at particularly high levels: Stephanie Momot, Rawewon from Thailand, Bonni from Melbourne, Tyler McGahee, Karen Shea, and John McArter. Please forgive us if we messed up your names, we do love you! And don’t forget, go to gastropod.com/survey and let us know just a little bit about you. You might win a $100 Amazon gift certificate. Also, email us at [email protected] is you have ideas for people who would be great on the show and who can help us diversify the voices you hear.
TWILLEY: And don’t be shy—nominate yourself if you fit the bill! Huge thanks this episode to Barry Popkin, Kelly Brownell, Sara Bleich, Esperanza Cerón, Adam Briggs, and Cristin Kearns. Thanks also to the fabulous Gabriella Gómez Mont, who generously volunteered to record a translation for Esperanza—for the past five years, Gabriella has run the Lab for the City in Mexico City, which is the coolest urban project I know of. Links to everything on gastropod dot com as always, so check it out—you can search for your city or different companies in Cristin’s new archive, or check out the soda tax calculator that Kelly created to see how much your city could raise from a soda tax.