March 22, 2010
|Brian W. Hartigan, a driver for Coca-Cola Bottling in Malone, uses a hand truck to move cans into the SUNY Potsdam student center last month. Photo by AP.|
The state health commissioner is asking for "open, public discussion" with the president of the American Beverage Association about the role soda plays in childhood obesity.
Health Commissioner Richard Daines sent a letter to Susan Neely, president of the beverage association, warning that a recent move by Pepsi to reduce the number of soda machines is nothing more than a ploy. (See sidebar page 29)
"The industry's strategy could not be clearer; lull parents into complacency with a symbolic announcement about almost non-existent soda sales in schools, then lure children into a new round of massive over-consumption during the summer when school's out and parents and children will replace school breakfasts and lunches with more trips to the fast food outlet," Daines wrote to Neely.
The letter comes as the debate over a proposed sugar tax on sodas and other beverages in the Executive Budget grows louder. Some lawmakers have now joined the fight on the side of grocers, bottlers and retailers who say the tax is unfair and misguided.
Sen. Diane J. Savino, D-Staten Island, led a rally against the proposed taxes on sodas and sugary beverages on Staten Island. Held at the Coca-Cola Sales and Distribution facility, the rally saw Savino and other Staten Island lawmakers speak before an estimated 400 workers to reject the proposal.
Pepsi Co., with its headquarters in Purchase, Westchester County, hinted it might consider moving its business out of New York if the tax is imposed. Sugar syrups, also subject to raised taxes, is an ingredient in many of Pepsi's products and would increase manufacturing costs for the company if the tax is imposed.
Dave DeCecco, spokesman for the company said in response to the proposed soda tax that, "We will be evaluating our options to relocate."
"The beverage tax is nothing more than a money grab. Instead of revisiting our regressive tax policies and wasteful spending, which have gotten us into the predicament we are in, this proposal is simply another way of increasing revenue on the backs of working families," said Savino.
Staten Island lawmakers Sen. Andrew Lanza, Assemblymen Louis Tobacco and Matthew Titone were also present.
"In these difficult economic times, the last thing hardworking Staten Island families need is to be hit with another tax from Albany," said Tobacco. "In addition to placing another burden on families, the soda tax will also hurt private-sector businesses, which are struggling to retain and create jobs."
Savino cautioned that a cross border effect could take place that is, if imposed, the proposed tax could drive out businesses from New York to neighboring states or to non-taxing jurisdictions.
Dayra Azcona, regional sales manager for Coca-Cola Enterprises; John O' Neil of Teamsters Local 812; Rene Paterson, legislative chair of New York Association of Convenience Stores; Nelson Eusibio, chairman of New Yorkers Against Unfair Taxes and Jerry Cesaro, senior vice president for sales and marketing for Key Food Stores Cooperative also attended the rally.
However, Daines said in advance of the rally that Staten Island has the second highest obesity rate and the second highest rate of sugar-sweetened beverage consumption in New York.
"I am concerned for the health of Staten Islanders," said Daines. "Sixty-five percent of Staten Island residents are overweight or obese, and 35 percent of them drink one or more cans of sugar-sweetened beverages like soda every day.
"I would ask Senators Andrew J. Lanza and Diane J. Savino as well as state Assembly members Michael J. Cusick, Janele Hyer-Spencer, Matthew Titone and Lou Tobacco: What are they doing about the alarming obesity rates in their borough?" Daines asked.
He urged the legislators to support the proposed tax and asked Staten Islanders to support the proposal.
The proposal would tax all sugary sodas and beverages one penny per ounce, raising the taxes on every two- liter bottle of soda by 64 cents. The taxes would also be extended to all beverages containing high-fructose corn syrup.
The tax rate of one penny per ounce would also apply to every ounce of beverage that would be constituted from powders. For example, a container of Lipton Iced Tea Mix that makes 20 quarts of iced tea when mixed with water, would be taxed one penny for every ounce of iced tea that the product makes — 640 ounces — resulting in a $6.40 tax on the container of drink mix.
The tax on powdered drinks was pointed out by Michael Rosen, senior vice president for the Food Industry Alliance during a press conference on March 8, where New Yorkers Against Unfair Taxes, together with 10 state senators and representatives from the business community who fervently expressed their opposition to the taxes.
Together with Daines, Gov. David A. Paterson said at a press conference earlier this month that the tax is a win-win-win situation for the state which would reduce $7.6 billion in obesity-related health care costs, allow for the resources saved to be devoted to other health care needs and help bridge the budget gap.
But retailers say taxing just one type of unhealthy product is unfair to store owners and consumers.
"This tax is unfair to working people," said Nelson Eusebio, executive director of the National Supermarket Association. He said the taxes would not necessarily reduce soda consumption, but more likely, that people will switch to cheaper sodas made under less regulated conditions.
John O'Neil from the International Brotherhood of Teamsters said, "We are here to express vehement opposition to all soda taxes."
He said transshipping has greatly affected the soda and beverage industry in New York. Transshipping refers to the practice of a vendor buying his soft drink products from a bottler outside the state, hurting the business of local bottlers. O'Neil said there is not enough supervision locally to prevent transshipping and it results in drinks coming in from bordering states like New Jersey.
Beverage and vending industry workers, whose businesses could be affected if the tax is imposed, chanted "Save My Job!" throughout the rally.
Sen. David Valesky, D-Oneida, said the soda tax is a "bad tax" for consumers, for business and the community. Valesky said whatever revenue it would generate would be offset by jobs lost. He said New Yorkers' health should be improved with education and not through a new tax.
Sen. Suzi Oppenheimer, D-Mamaroneck, also commented that it is unfair to tax one type of unhealthy food and not others. She provided an analogy that it would be similar to taxing white chocolate and not dark chocolate, saying it is illogical. In addition, she said the new taxes might result in people turning to diet sodas which would in turn could put too much aspartame, an artificial sweetener used as a sugar substitute, in our systems.
In response to reasons why the state would initiate such a tax proposal, Sen. Martin Golden, R-Brooklyn, said "There's nothing left to tax. We have to curtail spending in New York state. Personal responsibility and education are important, not taxation."
Senators William Stachowski, D-Lake View; Diane Savino, D-Staten Island; Andrea Stewart-Cousins, D-Yonkers; Darrel Aubertine, D- Cape Vincent; Jeff Klein, D-Bronx, and Eric Adams, D-Brooklyn, were also present.
Representatives from the business community are also angry about the proposed tax.
"There is no end to this tax," said Michael Elmendorf, state director of the National Federation of Independent Business.
Ken Adams, CEO of The Business Council of New York state and Jim Calvin from the New York Association of Convenient Stores voiced their resistance to the tax, saying it will force more businesses to move out of the state.
In an interview with The Legislative Gazette last month, Mike Esposito, president of the New York State Automatic Vending Association, said approximately 14,000 jobs would be lost in the state's vending industry if the taxes are imposed.
According to Esposito, vending association members would experience a significant loss of income on their delivery routes as increased soda prices could mean people will consolidate on their orders or buy other products, forcing layoffs.
Esposito said the vending business involves bottlers, delivery truck drivers and relevant businesses on the routes, convenience store owners and vending machines dispersed all around the state, which would all suffer if taxes are imposed.
The Director of Contracted Sales for Next Generation Vending and Food Services, headquartered in Canton, Massachusetts, Ray Simcuski said, "Soda is a very big portion of our business. Business generated through truck drivers, trucks, toll payments across highways will be affected."
John Murn, a member of the vending association's board of directors, said he supports freedom of choice and people should be allowed to choose what is healthy for them and what is not.
To support his pro-choice stand, Murn cited statistics from vending sales in Morgan Stanley and schools that showed an almost equal percentage of people from each place consciously make the choice to buy water over unhealthy drinks.
Simcuski pointed out that the vending business was at the forefront of introducing healthy options in vending machines.
Murn concluded that if the tax proposal is passed, the state will lose a lot of its soda and vending business to neighboring states and there will be an influx of soda from states such as New Jersey.
Despite all the opposition, Paterson and the Department of Health maintain that the tax is beneficial for the state. Also, the New York City Department of Health and Mental Hygiene introduced a new campaign last August asking New Yorkers, "Are You Pouring on the Pounds?" with a slogan "Don't Drink Yourself Fat."
According to Daines, the problem is not that New Yorkers are not educated about the health concerns related to soda consumption, but it is that soda is so heavily marketed, under-priced and easily available that it is a popular choice for many of them.
Ana Garcia, senior policy associate from The New York Academy of Medicine, agreed with Daines that the public is bombarded with advertising from soda companies and that education is not enough; the environment should be changed to help people make healthier choices.
"There are other products still on the shelf that businesses can provide and maintain," said Garcia, in response to businesses' claim that they would lose jobs due to the tax.
"The problem is not in the minds of an individual but the problem lies somewhere in society," said Thomas Farley, Health Commissioner of New York City, who is supporting Daines and Paterson. Farley points out that raising cigarette taxes had reduced smokers by 350,000 and prevented smoking-related deaths. Similarly, he predicts soda taxes can reduce soda consumption and prevent obesity-related problems.
Kelly Brownell, professor at Yale University and director of Rudd Center for Food Policy and Obesity, admits the tax will not solve obesity and that soda is not the only contributor to obesity, but Brownell said liquid calories are harder to expend. Addressing the argument that people will lose their jobs if the tax goes into effect, Brownell said diet soda and water sales will keep industry workers employed.
Jo Ivey Boufford, president of the New York Academy of Medicine, Nancy Huehnergarth, director of the New York state Healthy Eating and Physical Activity Alliance and Jennifer March-Joly, executive director of the Citizens' Committee for Children also testified at the press conference.