WAR ON OBESITY: Soda tax battle moves to states

WASHINGTON - After effectively quashing discussion of a federal tax on soft drinks last year, Coca-Cola, Pepsi and the fast food industry are facing a new battle on the state level, where legislators are beginning to consider their own taxes on sweetened beverages to improve public health and generate revenue.

The next showdown could be in California, where legislators last week vowed to pass such a tax in light of new studies linking soft drink consumption to obesity in children and adults. One study suggests that obesity and related problems cost California alone $41 billion a year in medical expenses and reduced productivity.

In the past year, proposals to alter the tax treatment of soft drinks have surfaced in 12 states, including a bill that recently passed the Colorado legislature. The city of Chicago currently taxes soft drink sales.

In Washington, the industry spent $54 million on lobbying and millions more in campaign donations to key officials, effectively derailing any discussion of taxing soft drinks as a means of funding the federal health-care overhaul. The industry also partnered with community activist groups - including several in the president's hometown of Chicago - to oppose a federal tax.

But the industry's strategy has begun to fray around the edges. Some of the community and minority groups that partnered with the soda lobby last year are under pressure from state groups to sever their ties to the beverage industry.

After the Tribune Washington bureau reported on the industry's efforts to recruit activist minority groups to its "anti-tax' campaign, one of the most prominent organizations _ the National Hispanic Medical Association _ dropped its alliance with the industry.

The California affiliates of two other groups have split from their parent organizations and are considering support for taxes on sweetened soft drinks.

Nonetheless, Kevin Keane, a senior vice president for the American Beverage Association, called the tax idea a "money grab" that will hurt working families.

"When it comes to soda taxes, the idea hasn't gone anywhere for good reasons," Keane said. "People are hurting. Congress understood that a consumer tax would only add to their pain, not help it."

When California Senate Majority Leader Dean Florez, D-Shafter, introduced his soda tax bill, he said his proposal to add one penny of tax per teaspoon of added sugar in any sweetened beverage would generate as much as $1.5 billion each year. That money would pay for parks, recreation and school health programs, Florez said.

"The legislature is primed for this bill," Florez said, adding that he expects bipartisan support.

Though Gov. Arnold Schwarzenegger has pledged to oppose new taxes, Florez believes the governor, a longtime advocate of improved nutrition, will sign the bill if it lands on his desk.

Industry officials say they are taking voluntary steps to discourage soda overconsumption. For example, the American Beverage Association worked closely with first lady Michelle Obama's "Let's Move" campaign and pledged to prominently display nutrition information on containers and soda fountains.

"There is no industry in America that has stepped up to do its share to address a complex societal problem like childhood obesity more than the beverage industry," Keane said.

That argument angers public health advocates such as Harold Goldstein, head of the nonpartisan California Center for Public Health Advocacy, which helped Florez craft his bill.

Goldstein sees the beverage industry's voluntary measures as part of "a concerted effort to undermine discussions across the country" to tax soda. And he was highly critical of the industry outreach to minority groups that suffer the most from obesity.

Last year, Coke executives contacted Erie Neighborhood House, a venerable settlement house in a Latino section of Chicago, that had received company donations in the past. Coke asked that Erie join the "Americans Against Food Taxes" coalition _ a campaign organized by food and beverage companies that subsequently launched a $10 million advertising and letter writing blitz against the proposed federal soda tax.

Celena Roldan, executive director of Erie House, said the community group supports healthy eating, but opposes a tax that "hurts our families who are trying to survive on very low incomes."

Erie was one of several community organizations in the Obamas' home town that joined the campaign. No other city had local organizations participating in the same fashion, although several prominent national activist groups signed on.

In California, the state affiliate of the League of United Latino American Citizens this weekend will consider a resolution urging its national assembly to leave the coalition.

National executive director Brett Wilkes said LULAC opposed the tax proposal because it would disproportionately affect poor people, not because of donations from the coalition.

Coke also partnered last year with the American Academy of Family Physicians, an organization representing 93,700 doctors and medical students. The academy last year disclosed that Coke paid the group a sum "in the high six figures," to publish educational materials on its web site relating to consumption of added sugar.

The academy's California chapter asked the national organization to end its relationship with Coke and offered $100,000 to help defray the loss of funds. But Dr. Douglas E. Henley, the group's executive vice president and CEO, said the group saw no need to end the partnership.

"We were, to put it mildly, enraged," said Dr. William Walker, a family practitioner and head of Contra Costa Health Services in northern California, who quit the Academy in protest.

Henley stressed that there is a "firewall" to protect the materials from interference by Coke.

But some nutrition experts who have reviewed the materials on the Academy site criticized them as overly friendly to the industry's viewpoint.

Henley said the AAFP is still considering whether to take a position on taxing soda.

Meanwhile, the California chapter earlier this month called on Schwarzenegger and the state legislature to impose a soda tax rather than cut state-funded health programs.

Florez said he expects a bill to make it to Gov. Arnold Schwarzenegger's desk this year. A spokesman for the governor has said he will promote nutrition through other means, including an obesity summit he will hold this week in Los Angeles with former President Bill Clinton, who has made the issue a priority.

Last year, Clinton stunned anti-obesity activists when he personally came out against the tax idea. A few months later, Coke provided a $5 million contribution to the William J. Clinton Foundation. A partnership for healthy eating that Clinton's foundation helped form later distanced itself from the former president's comments, posting a notice on its web site that it did not take advocacy positions.