Can The Soda Industry's $4 Million Ad Blitz Fend Off A Sugary Drink Tax?

Jun 15, 2016
Originally published on June 15, 2016 10:48 am

When the mayor of Philadelphia first proposed a 3 cents-per-ounce tax on sugary drinks, the American Beverage Association was quick to finance a campaign railing against it.

Since March, records show that the industry has financed more than $4.2 million in media buys in Philadelphia to air ads aimed at turning public opinion against the proposal.

"This tax could mean higher prices on hundreds of grocery items with some sugar, like soft drinks, sports drinks, juice drinks, energy drinks and teas," intones the narrator in one ad. "Many products could double in price," the narrator says. "Take action: Contact your city council member today."

The group No Philly Grocery Tax, which is funded by the American Beverage Industry, has also gathered testimonials from local grocery operators and small-business owners who oppose the tax.

If implemented, "the bottom line, it's going to hurt. It would definitely have an effect on my revenue — I would have to increase the price," local business owner Wayne Green says in one of the video testimonials.

So far, these ads have not dissuaded the City Council from moving forward. Last week, members took a step toward approving a modified version of the mayor's proposal. What's on the table now — and up for a final vote Thursday — is a tax of 1.5 cents per ounce that would also include diet drinks and other artificially sweetened beverages.

One of the mayor's selling points in persuading the City Council to support the measure is that much of the estimated $91 million the tax would bring to the city's coffers each year would boost funding for programs including citywide pre-K education.

So, who's helping to get the mayor's message out? A well-funded group called Philadelphians For A Fair Future has spent about $1.3 million in media buys to counter the soda industry's messages. One spot features a Philadelphia pastor, James Hall, who frames the issue as a matter of right and wrong.

"We are the poorest big city in America," Hall says, while looking into the camera. "The soda companies profit by targeting the poorest communities. Now, they're being asked to give a little back. ... It's the right thing to do."

Philadelphians For A Fair Future has financial backing from philanthropists including John and Laura Arnold, who have contributed $400,000 to the effort. (Note: It's their personal gift, not from their foundation.) In a statement, John Arnold told us why he's supporting the effort.

"There is no question as to the adverse health effects of the high amounts of sugar in soda and sports drinks. Growing scientific evidence shows that an excess of sugar can overload critical organs over time, leading to serious diseases including heart disease, liver disease, and diabetes," Arnold wrote.

"A yes vote by the city council will allow the city to begin battling the harmful effects of sugar," Arnold concludes.

Another major supporter is Michael Bloomberg, who took on big-sodas when he was mayor of New York City. As we've reported, Bloomberg also supported the campaign to tax sugary beverages in Berkeley, Calif. After it passed, Bloomberg adviser Howard Wolfson called the tax a huge defeat for Big Soda and a big victory for public health. "The results will surely encourage other municipalities across the nation to pursue similar initiatives to fight obesity and diabetes," Wolfson told us back in 2014.

For clues as to how a tax would affect sales of sugary drinks, we can look to Mexico. After the country passed a tax on sugary drinks in 2014, sales dipped, according to an analysis published in The BMJ. Researchers predict this would likely happen in Philadelphia, too.

"The evidence is clear that when prices go up, people buy less of things, "says Michael Long of George Washington University. He and colleagues at the Harvard School of Public Health published a 10-year estimate of the health impacts of a 1-cent-per-ounce tax on sugary drinks in Philadelphia.

"We'd expect over 12,000 cases of obesity prevented by the end of the 10-year period, as well as $65 million in health care cost savings over the 10-year period," Long told us in an interview.

The industry-funded opposition group, No Philly Grocery Tax, says the tax would be unfair — and that a growing number of residents in Philadelphia oppose it. "If this was a referendum, we'd win it," Larry Ceisler, a spokesperson for the group, told us.

He pointed to new polling data that shows 58 percent of respondents do not support the tax on sweetened beverages, though, as we've reported, other polls point to wider support for the measure.

I asked Ceisler if the $4 million in opposition ads have gotten the group what it wants. "We've spent a significant amount of money, but you have to," Ceisler says. "And that's [how] we turned public opinion."

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With pretty much all of us needing to cut back on sugar, some say making sugar more expensive is one way to get people to consume less. The residents of Philadelphia may soon find out if that works. The city council is expected to vote tomorrow on a proposal to tax soda and other sugary drinks. NPR's Allison Aubrey reports, this hasn't gone over well with the beverage industry, which has spent millions of dollars to defeat the measure.

ALLISON AUBREY, BYLINE: When the mayor of Philadelphia first proposed a three-cent per-ounce tax on sugary drinks, the American Beverage Association, which includes Coke and Pepsi as members, was quick to finance a campaign railing against it. Since March, records show they've spent about $4.2 million on TV and other media buys to air spots like this one.

(SOUNDBITE OF AMERICAN BEVERAGE ASSOCIATION AD)

UNIDENTIFIED NARRATOR: This tax could mean higher prices on hundreds of grocery items with some sugar, like soft drinks, sports drinks, juice drinks, energy drinks and teas. Take action because three cents adds up fast.

AUBREY: Small-business owners would also lose out according to the industry-funded group called No Philly Grocery Tax, which has gathered the testimonials such as this one from Wayne Green.

(SOUNDBITE OF TESTIMONIAL)

WAYNE GREEN: If it is implemented, the bottom line - it's going to hurt. It would definitely have an effect on my revenue.

AUBREY: So far, these ads have not dissuaded the city council. Last week, members took a first step towards approving a modified version of the mayor's proposal. What's on the table and is up for a final vote is a tax of 1.5 cents per-ounce that would also include diet drinks. This would add about a quarter tax to a 16-ounce soda.

Now, the big selling point here is that much of the estimated $100 million dollars-a-year raised by the tax would help boost funding for programs such as citywide pre-K education, something that Philadelphia Pastor James Hall says in this ad spot is what the city needs.

(SOUNDBITE OF AD)

JAMES HALL: We are the poorest big city in America. The soda companies profit by targeting the poorest communities. Now they are being asked to give it a little back. It's the right thing to do.

AUBREY: This ad was paid for by a group called Philadelphians For a Fair Future, which has spent about $1.3 million dollars on ads to counter the beverage industry's messages. Now, much of the financial backing has come from Michael Bloomberg, who took on big sodas when he was mayor of New York City, and from philanthropists Laura and John Arnold, who say that the tax would help the city battle the harmful effects of sugar. For clues as to how the tax would impact sales of sugary drinks, we can look to Mexico. After the country passed a tax on sugary drinks in 2014, sales dipped about 12 percent. Michael Long of George Washington University, who studies strategies to fight obesity, predicts this would happen in Philly, too.

MICHAEL LONG: The evidence is clear that when prices go up, people buy less of things.

AUBREY: And this decline, Long says, would benefit the waistlines of the residents of the City of Brotherly Love. He and his colleagues at the Harvard School of Public Health published a 10-year estimate.

LONG: We'd expect over 12,000 cases of obesity prevented by the end of the 10-year period and $65 million in health care cost savings.

AUBREY: The opposition group No Philly Grocery Tax says the tax would be unfair, and the group's spokesperson, Larry Ceisler, says their new poll shows public opinion is on their side.

LARRY CEISLER: We found that 58 percent of Philadelphians oppose this tax.

AUBREY: And Ceisler says if the city council does pass the tax on sweetened drinks, there are a number of strategies they could use to fight it. Allison Aubrey, NPR News. Transcript provided by NPR, Copyright NPR.