Tax Incentives for Food Corporations a Better Way to Trim the Fat

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Here’s a press release outlining my position on why tax incentives make better sense than taxing soft drinks in order to lower rates of obesity:

 

FOR IMMEDIATE RELEASE
September 22, 2009
 
Author Stirs “Fat” Tax Debate with Controversial Proposal
Anti-Obesity Advocate and Former Food Executive Says Tax Incentives for Food Corporations a Better Way to Trim the Fat
 
Chapel Hill, N.C. – (September 22, 2009) Hank Cardello, a well-known author, advocate for addressing America’s obesity epidemic and former food industry executive has spent more than thirty years as a senior executive for some of America’s largest food and beverage manufacturers. While Cardello is the first to admit that the food industry has played some role in the proliferation of obesity in America, Cardello’s position highlights the importance of engaging the food industry to solve the problem – through incentives rather than ineffective taxes on select products deemed “unhealthy” by government and health advocates. Cardello also wants to tap into the marketing power of the food industry to help educate consumers about portion control.

What’s wrong with soft drink taxes? Only 7 percent of the calories we consume are from soft drinks, and numerous studies (1) have demonstrated that these taxes will not curb consumer’s decisions to drink sodas. Additionally, consumers have failed time and again to control their weight with traditional solutions such as diet and exercise.  Therefore, the food industry must play a role by working to reduce the number of calories available to American consumers.  Simply taxing select items is not a powerful enough approach for a problem of this magnitude.

“There is no single food or beverage that can be selected as “the enemy” when considering our nation’s obesity crisis,” explains Cardello.  “The real enemy is the number of excess calories available for consumption in America today, regardless of the source. The only way to slim down this beast is to engage the food industry by trying to reduce the number of calories put into the American food supply.”
 
Cardello’s recently published book entitled “Stuffed: An Insider’s Look at Who’s (Really) Making America Fat” (HarperCollins), provides an insider’s look at the business of food and how the food industry can profitably solve the obesity epidemic. 
 
“Rather than alienate or overregulate the food industry, we need to put into effect tax incentives that would entice food companies to sell fewer calories. Companies that cut their calories should be rewarded. Those that continue to spew excess calories on the public should risk losing favorable tax treatments.”
 
According to The Obesity Society, approximately 127 million adults are overweight, 60 million are obese and 9 million are severely obese. Currently, 64.5 percent of U.S. adults, age 20 years and older, are overweight and 30.5 percent are obese. Experts estimate that obesity represents ten percent of all medical costs in the U.S. or $147 billion annually.  Cardello realizes the significance of this issue and is working to make a difference.
 
Interesting Facts Taken from Hank Cardello’s Stuffed: An Insider’s Look at Who’s (Really) Making America Fat:
•         The number of calories available for consumption in America has gone up 29 percent per person since the 1950s.
•         The original Swanson’s TV dinner, created in 1953, was under 300 calories.
•         Research shows some portions at fast food restaurants are now two to five times larger than those of the 1950s.
•         The 100-calorie pack is a perfect example of how food companies can profit while helping address obesity.

About Hank Cardello

Hank Cardello is a successful executive, author and business expert focused on developing practical and innovative solutions to address social problems such as obesity.  His business philosophy – one of socially responsible capitalism – promotes organizations’ ability to make a profit while addressing important social issues. A former food and beverage executive with companies including Coca-Cola and General Mills, he is the author of Stuffed: An Insider’s Look at Who’s (Really) Making America Fat (www.StuffedNation.com). Cardello chairs the Global Obesity Business Forum sponsored by the University of North Carolina at Chapel Hill, and also serves as chief executive officer of 27ºNorth (www.27degNorth.com), an advisory firm focusing on these issues.

Follow Hank on Twitter @StuffedNation.

 

 
(1)“Can Soft Drink Taxes Reduce Population Weight?” (Fletcher, Frisvold & Tefft). Their results show that the magnitude of taxing is small because soft drinks represent only 7 percent of a person’s total calorie intake. The authors calculate that if a 75-cent soda was taxed to a higher price of 90 cents, the Body Mass Index (BMI) of a severely obese person would fall from 40 to just 39.98. They also conclude that even by raising the tax rate to be comparable with cigarettes (58%), the impact on population weight would be negligible.
 
“Cheap Donuts and Expensive Broccoli.” (Gelbach, Klick & Stratmann). The authors considered the effect of a 100 percent tax on all unhealthful foods in their (higher) price index. They concluded that Body Mass Index (BMI) is reduced by less than 0.2 points. These results suggest that “fat taxes” are not a viable tool to lower obesity.
 
 “Determining the Impact of Food Price and Income Changes on Body Weight.” (Schroeter, Lusk & Tyner). They calculated that a 10% tax on soft drinks would lead to a weight loss of only .189 pounds for an average man and .201 pounds for an average woman.

 

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  15. Scott says:

    The food industry IS the blame for the obesity and type 2 diabetes explosion. The most serious disease to hit the world since AIDS is type 2 diabetes. It has nothing to do with being overweight. We are talking about what would be the biggest lawsuit in USA history!
    The Type 2 diabetes diets alone shows the poisoning of the food suppy. As usual the PEOPLE WERE SOLD OUT FOR THE $$$PAPER

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  17. Thanks for your comments. While the food industry plays a part, we as consumers, government regulators and the media all make this the problem that it has become. That’s why motivating the food industry to lower the calories is a big part of my program.

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