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Not all are sweet on sugary drink tax

Coca-Cola products in a cooler at a convenience store.

TEXT OF STORY

Bill Radke: This week, Pepsi announced it is racing to find new natural zero-calorie sweeteners -- something that might help it get around a possible tax on sugary beverages. State and federal lawmakers are considering imposing a tax in the near future. Marketplace's Jeremy Hobson reports not everybody thinks that tax would have the desired effect.


Jeremy Hobson: A study out this morning from the RAND Corporation doesn't quarrel with the idea that a national sugary beverage tax would bring in money. But RAND Senior Economist Roland Sturm says a 3 [percent] to 5 percent tax wouldn't convince people -- especially kids -- to cut back.

Roland Sturm: It's not the magic bullet.

He says a larger tax -- maybe 20 percent -- would be needed. And it would work best, he says, if it made the price of the product on the shelf look much more expensive than other drinks.

Sturm: This tax would have to be visible. If the goal is not just to raise money but the goal is to change consumption, then consumers need to be clearly aware of it.

As you might expect, the industry is fighting hard against the idea. Here's Kelly Brownell, who directs Yale's Center on Food Policy and Obesity:

Kelly Brownell: I've never seen the industry respond so negatively to any proposal, which proves to me two things. One is that it's politically feasible, otherwise why would they worry about it. And second is that they believe it would really affect consumption.

Brownell says a national sugary beverage tax would bring in $15 billion a year.

In New York, I'm Jeremy Hobson for Marketplace.

About the author

Jeremy Hobson is host of Marketplace Morning Report, where he looks at business news from a global perspective to prepare listeners for the day ahead.

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