Wednesday, October 14, 2015
The soft drink industry has been under assault for sugar in its colas. There are now proposals to tax the beverages as a way to reduce consumption. This is a long-term PR headache for Pepsi and Coke and the many regional drink makers, and it was made worse by Mexico's example. That country levied a tax on soft drinks and successfully reduced consumption, especially among the poor. There is no evidence yet that it has cut obesity and diabetes, but, it has demonstrated that price is a factor in soft drink sales. As one would expect, the lobbying group for cola makers, the American Beverage Association, disputes the evidence and is working hard to keep taxes from driving up the price of drinks. Time will tell whether the industry is successful, Meanwhile the threat of taxation hangs over the heads of cola makers who are scrambling to introduce drinks without sugar.