> However, HFCS make up ~3.5% of the cost of a soft drink, and the cost of corn is less than half the total cost of making HFCS, which means the total impact of corn subsidies on the price of a soft drink is a couple of pennies.
The actual cost of manufacturing a soft drink is in the order of pennies - [0] does a breakdown where the numbers are likely wrong but in the right ballpark. An increase of a few c per litre in tax at the production level would have a huge knock on effect on the price of the drinks, unless the manufacturers eat the increases.
Customers are also hugely price sensitive, an increase of a few pence can have a massive change on purchasing patterns.
> No doubt people will arrive shortly to knee-jerk against sugary drink taxes; but would they mind explaining why sugar is made artificially cheap to start with?
It's a bit more complicated than that. US agricultural policy subsidises corn production (driving prices down), but US trade policy keeps cheap sugar out of the country, while US energy policy diverts corn into making biofuels, both of which drive prices back up. It's not clear what the net effect is.
Even the impact of corn subsidies alone does not seem to be enormous, however. Some estimates have corn subsidies driving the cost of corn down by ~27%, with flow on effects to the prices of meat, dairy, and yes, HFCS. However, HFCS make up ~3.5% of the cost of a soft drink, and the cost of corn is less than half the total cost of making HFCS, which means the total impact of corn subsidies on the price of a soft drink is a couple of pennies.
In other words, if we wanted a sugary drink tax to counteract the impact of corn subsidies in the US, it would probably need to be on the order of 1-2%. Would a 1% tax have any measurable impact on consumption? Unlikely.
Meanwhile, Australia has no subsidies, mostly uses sugar (and not HFCS) but has the same obesity patterns as the US. Analysis of obesity and agricultural policy across countries finds no trends.
> This had the side effect of sugar being a cheaper food ingredient than most of the alternatives, even in countries that didn't directly import HFCS (since the US was no longer removing as much raw sugar from the market, driving down costs).
Only in the short term; that effect would have ended years ago. The global price of sugar now is driven by the marginal cost of production in Brazil, mostly. Americans don't consume (much) imported sugar, but they also don't export much HFCS, and most of what they do export goes to a single country (Mexico). There's no glut of "sugar the US would have consumed" on the market.
Second, global sugar prices have been pretty flat for the last 20 years; I don't think your link 3 is really showing what you say. You can poke at the chart here: https://www.macrotrends.net/2537/sugar-prices-historical-cha... but I'm not sure what I'm meant to be seeing.
> And if you actually want people to drink less soda, stop subsidizing the production of corn syrup.
Eliminate all sugar subsidies would have better health outcomes. Big Sugar is a real lobbying force to reckon with in US politics. Considering how damaging sugar is to the US healthcare system's overall affordability that all US citizens pay for, I'm not opposed to an instantaneous elimination of the subsidies, and let the chips of the attendant unemployment associated with Big Sugar fall where they may. Those subsidies come with a horrendous long tail of consequences.
>>> This is partially because of corn subsidies by the government (which makes HFCS cheaper than its "actual" price).
Both sugar and corn are heavily subsidized, but sugar AFAIK is subsidized by tariffs (i.e. higher prices for the consumer) and corn by transfers. I have no idea why - probably "biofuels" fiasco has a lot to do with it, but not sure if it is the main cause.
>>> for the government to stop making drastic declarations in nutrition that can lead to these really strange and unexpected consequences.
You mean, the government to stop regulating what we eat and trying to protect us from ourselves? Fat chance.
> It'll be like the sugar tax in Norway. Do you really think people are buying less sugar over here because of it? Get real!
I can't speak for Norway, but in the UK the sugar tax has had a huge impact - a _majority_ of soft drink manufacturers have significantly reduced sugar in their products, to avoid them becoming unaffordable, and it's had a very noticeable effect.
The UK tax is still pretty new so it's difficult to get hard numbers on that, but sugar taxes in general are fairly well studied and have been very effective worldwide. https://www.nature.com/articles/sj.bdj.2018.603 has a good summary, some highlights:
* "Overall 21.6% decrease in the monthly purchased volume of the higher taxed, sugary soft drinks"
* "People living in Philadelphia were 40% less likely to report consuming sugary drinks every day after the tax policy"
* "Mexico's 10% tax on sugar-sweetened beverages implemented in January 2014 is said to have led to a 5.5% drop in sugary drinks purchases by the end of that year and a further 9.7% fall in sales in 2015, yielding an average reduction of 7.6% over the study two-year period"
> Pollution tax: yes; you are being taxed for affecting others. Soda tax: no; you are hurting no one but yourself, and it is a stretch to say otherwise.
In this case you should consider: who is hurting whom? The research of Ariely and the experimental results of the marketing industry have made it clear that your choice to buy soda is not simply a transaction between yourself and the grocery store. It involves the government’s need for cheap calories to prevent social unrest, and it involves the sugar industry’s ongoing efforts to keep carbohydrate overloads socially acceptable. Soda is the industry hurting you.
>In other words, if we wanted a sugary drink tax to counteract the impact of corn subsidies in the US, [...]
But that's not the point of a soda tax: it's to shape consumer behavior and cause them to prefer smaller portion sizes if they don't simply switch off sugary drinks altogether. That's why the taxes are 1-2 cents per ounce on sugary drinks.
Philadelphia saw a 38% reduction in sales of sugary drinks after a 1.5 per ounce tax was added. [1]
Beverage sales inside Philadelphia’s city limits dropped by 51% but were partially offset by an increase in sales just outside the city, resulting in a net decrease in soda sales of 38% in the area, researchers at the University of Pennsylvania found.
> At least then people would think twice before ordering a $10 corn-syrup soda vs a $2 no-sugar one.
That's just it, I don't like the idea of bullying people into healthy eating. I don't want to end up in a future where it's illegal to consume more than 2000 calories in a day. Fortunately people don't seem to like this idea given the reception of the large soda ban in NYC.
> Assuming they're taxing based on the sugar content, then that's the expected outcome. Coke, Sprite, and juice have sugar in them, sparkling water doesn't.
But to what end? Those people still ate poorly, and continued to make those poor purchase decisions and had less money to justify making better ones as they didn't miraculously start drinking San Peligrino Italian soda, which also has sugar in them [0].
> just like drinking a big gulp with 32768 calories per cup is low status now
The reason it backfired is ignorant statements like this. A 12 ounce mocha Frappuccino contains nearly double the calories of a 12 ounce Coke. The Starbucks drink is exempt from the tax because it has a bunch of milk.
The soda tax is a tax on the poor only moderately related to health.
> The solution is to tax added sugar (including for sub-ingredients) per gram, and a flat tax for any food containing artificial sweeteners. 1c per gram of sugar, or 20% for anything containing artificial sweeteners seems reasonable.
A sugar tax would mostly impact the people who have the least choice in what they buy, due to poverty and/or the availability of healthier foods. (See: food deserts)
Better to work on the affordability and availability of healthy food than try to penalize people for buying stuff that's cheap and ubiquitous. If you want to apply sticks, apply them to large retailers like Wal-mart and Target instead of to individuals.
Instead of a sugary drinks tax, how about ending corn subsidies that cause high fructose corn syrup to be so cheap? That would naturally cause soda to be more expensive
> The study, published online in the American Journal of Agricultural Economics, found that a half-cent per ounce increase in sugar-sweetened beverage prices, which adds up to about ten cents on a typical 20-ounce bottle of soda, could reduce total calories from the 23 foods and beverages examined under the study.
> However, researchers found, the reduction in sugary beverages due to a soda tax would likely lead consumers to substitute for those beverage calories by increasing their calorie, salt and fat intake from untaxed foods and beverages.
> “Instituting a sugary beverage tax may be an appealing public policy option to curb obesity, but it’s not as easy to use taxes to curb obesity as it is with smoking,” said Chen Zhen, Ph.D., a research economist at RTI, and the paper’s lead author. “Consumers can simply substitute an untaxed high calorie food for a taxed one. And as we know, reducing calories is just one of many ways to promoting healthy eating and reducing nutrition-related chronic disease.”
> If the tax is associated directly with sugar in some manner than diet sodas won't be taxed.
Running with this idea, there'll eventually be a federal conversion table where any given chemical would be translated to their mass in sugar. From there, tax calculation's simply:
sum((sugar_conversion_lookup[ingredient] * mass) for ingredient in product) * tax_per_gram_of_sugar
> A problem with malternatives has been the need to find ways to mask the beer-like flavor that results from brewing. To that end, these drinks have added sugar and strong citrus flavors, which a lot of consumers like.
Nice! Our tax laws encourage companies to make less palatable goods that then require more added sugar to compensate thus upping everyone's carbohydrate intake without it actually tasting as good as those carbs would be in a cake or some such. How wonderful! /s
No doubt people will arrive shortly to knee-jerk against sugary drink taxes; but would they mind explaining why sugar is made artificially cheap to start with?
Obesity massively increased internationally after the mid-1970s US agriculture policy changes ([0]). Specifically look at corn production after the mid 1970s[1]. One of corn's products is HFCS, the massive influx of this sugar substitute drove international raw sugar prices down until 2007[2].
This had the side effect of sugar being a cheaper food ingredient than most of the alternatives, even in countries that didn't directly import HFCS (since the US was no longer removing as much raw sugar from the market, driving down costs).
A lot of people who bring up HFCS try to paint it as an even less healthy sugar, my point is more nuanced than that: That HFCS is driving down prices and causing more, even raw sugar, to appear in foods as both sugar/HFCS are subsidized by US aggro policy (and tax payer cash) since between mid-1970s and today.
We can pass sugar-drink taxes, but it feels like fixing a leak with duct tape. Instead, we should fix the whole pipe, by changing US aggro policy so that HFCS isn't unnaturally cheap. This will cause both food manufacturers and consumers to consider the healthier and cheaper alternatives.
PS - I'm not against sugar-drink taxes as an interim step.
In fact approx 10+ yrs ago the NY Times Sunday mag ran an article that said what you just did. In short, corn subsidies lead to cheap sweeteners, and those to cheap (but frutose based) foods.
Ironic that cities (e.g., Philadelphia) have a (so called) sugar drink tax" but their tax dollars (via subsidies) were already used to lower the cost of those drinks. Ultimately, the consumer pays. The consumer always pays.
> On a particularly dumb note, ciders are limited by law to 0.64g per 100ml, or 3.2 volumes. Above that level they cease being ciders and instead become a sparkling wine. This is very important because natural cider is taxed at $0.226 per gallon, while sparkling wine is taxed at $3.30 or $3.40 per gallon depending on how the carbonation is added. This is a difference of roughly 30 cents per standard bottle, or $1.79 per six pack; enough of a difference to make similar products more attractive on the market place shelf.
I've seen this with chocolate too. The definition of chocolate in the UK and EU apparently requires one of the ingredients to be sugar, making sugar-free chocolate unable to be called chocolate unless it actually contains sugar. A friend of mine runs a keto chocolate company and he has to include a small amount of coconut sap to actually be allowed to market it as chocolate, even though he's trying to minimise carbohydrate content.
On the one hand, this seems a rather silly law, but on the other hand, how else do you define what a particular product is? Is it down to how it's marketed? Because then companies will just market it as something else that still hints it's the thing it's not, to avoid the tax and potentially gain more price-conscious customers.
The actual cost of manufacturing a soft drink is in the order of pennies - [0] does a breakdown where the numbers are likely wrong but in the right ballpark. An increase of a few c per litre in tax at the production level would have a huge knock on effect on the price of the drinks, unless the manufacturers eat the increases.
Customers are also hugely price sensitive, an increase of a few pence can have a massive change on purchasing patterns.
[0] https://www.quora.com/How-much-does-it-cost-to-manufacture-3...
reply