"Happiness" Subsidized: Big Soda Doesn't Want A Tax On Drinking Soda. But They Don't Seem To Mind Taxing You To Sell More Soda.
Even those who defend the swilling of soda and sugary drinks as an American right, best metered by “personal responsibility”, have to concede that the products themselves don’t really add any meaningful nutritional value to the bodies of their drinkers. But still these bevs have risen through the meritocracy of American consumer preference to become the single largest source of calories in our national diet. And our waist sizes have risen somewhat proportionally. But enough about public health, let’s examine if sellers of sugary beverages can attribute all their success to their own marketing brilliance and tasty liquid concoctions or if these defenders of liquid freedom of choice have evidence of ‘nannying’ in their growth curve.
Let’s start with the basics, as in, basic ingredients and basic business reality. It’s well established that HFCS is a core ingredient of today's sugary drinks canon. And this data from the USDA shows just how much in general terms:
Demand for HFCS is driven by demand for products that use the syrups as inputs. For HFCS-55, the major use is in the beverage industry, which demands over 90 percent of total domestic deliveries. Major food users of HFCS-42 include the beverage industry (41 percent), processed food manufacturers (22 percent), cereal and bakery producers (14 percent), multiple-use food manufacturers (12 percent), the dairy industry (9 percent), and the confectionery industry (1 percent).
It is estimated that, in the 2000s, about 511 million bushels of corn, or about 4.7 percent of the total U.S. corn crop, has been be used to produce HFCS. http://www.ers.usda.gov/topics/crops/sugar-sweeteners/background.aspx
So it follows that the acquisition cost of this ingredient has a major bearing on sky-rocketing profits. And not only was the price of HFCS less than cane sugar, until 2011 the price of HFCS was driven artificially low by a corn subsidy. A subsidy that just happened to coincide with late 1970’s US instituted tariffs that drove up the price of sugar.
The combination suddenly made HFCS a great deal for food producers. Beginning in the mid-1980s, the sweetener started working its way into foods, and within a few years, it was showing up in thousands of products -- contributing thousands of empty calories a week to the average American diet.
- Bruce Watson, senior features writer for DailyFinance
And while the death of the heavy corn subsidy is likely raising the cost of goods for big soda there is a major boon on the demand side that most certainly lightens the mood in their boardrooms. According to a new study from Yale University researchers published last Monday by the American Journal of Preventive Medicine; S.N.A.P., The Supplemental Nutrition Assistance Program, formerly known as food stamps, pays out as much as $2.1 billion annually for the purchases of sugary drinks. As the researchers concluded, “Allowing annual use of multi-billions of SNAP benefits to purchase products that are at the core of public health concerns about obesity and chronic illnesses appears misaligned with the goals of helping low-income families live active, healthy lives.” But again, enough about public health, this is just business. Big fat business. And if you don’t think it is, just feast your eyes on this:
"Coca-Cola, the Corn Refiners of America, and Kraft Foods all lobbied successfully against a Florida bill that aimed to disallow SNAP purchases for soda and junk food. Proposals from other jurisdictions, which would also limit purchases of candy, cakes and chips with food stamps, have either failed or stalled amid intense lobbying."
- From the report “Food Stamps: Follow the Money” http://www.eatdrinkpolitics.com/wp-content/uploads/FoodStampsFollowtheMoneySimon.pdf
So remember, the government should never attempt to tell you what you should or shouldn’t eat. No, that right belongs to big soda exclusively, even if a more inclusive process might be giving a leg up to our collective nutritional IQ and potentially lead our nation to a healthier and more productive place. That’s not the kind of help we need. In fact, we don’t need help making decisions at all. We would hate to limit any of the maternal bandwidth that could be flowing the direction of those captains of industry who produce so many bottles of liquid happiness. Choice should be preserved at all costs. Because in the end we’d rather have the right to buy happy with government welfare than be reminded by the government that we control our own welfare and happiness. That’s the new American way brought to you by big soda and paid for by us all.
by Adam Butler
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