"Whenever I go into a restaurant, I order both a chicken and an egg to see which comes first"

Monday, June 4, 2012

Big Brother in a Soda Can

A recent article (5.31.12) in the New York Times reports on Mayor Michael Bloomberg’s proposed ban on supersized soft drinks.   http://www.nytimes.com/2012/05/31/nyregion/bloomberg-plans-a-ban-on-large-sugared-drinks.html

New York City plans to enact a far-reaching ban on the sale of large sodas and other sugary drinks at restaurants, movie theaters and street carts, in the most ambitious effort yet by the Bloomberg administration to combat rising obesity.

The proposed ban would affect virtually the entire menu of popular sugary drinks found in delis, fast-food franchises and even sports arenas, from energy drinks to pre-sweetened iced teas. The sale of any cup or bottle of sweetened drink larger than 16 fluid ounces — about the size of a medium coffee, and smaller than a common soda bottle — would be prohibited under the first-in-the-nation plan, which could take effect as soon as next March.

The measure would not apply to diet sodas, fruit juices, dairy-based drinks like milkshakes, or alcoholic beverages; it would not extend to beverages sold in grocery stores or convenience stores.

Obesity is a national concern, and I have written on it recently on this blog http://www.uncleguidosfacts.com/2012/05/obesitywere-in-it-for-long-haul.html.  I have suggested in the title that “We Are In It For The Long Haul” because the social, cultural, economic, and other causes of the problem are so complex that it is unlikely that the so-called epidemic will peak any time soon.  Perhaps most important of the may factors contributing obesity is poverty – low income people simply do not have the resources to eat healthy foods (fresh fruits, vegetables, fish) nor become members of health clubs, or even have the free time to exercise regularly.  Fast food is not only relatively cheap, but offers one of the few recreational outlets for a poor family.  The United States subsidy programs are such that the ingredients of fast foods are supported heavily while more healthy ones are not.

Juices and sugared drinks contribute significantly to obesity, and people consume them out of habit and boredom as much as desiring them for taste and satisfaction.  The habit for sweetened juice starts in childhood when parents mistakenly assume that ‘fruit juice’ has to be good for their children and they make few efforts to restrict intake.  Not only does this juice add unneeded calories, but it crowds out other more nutritious foods.  Children that are filled with sweetened juice before meals are unlikely to be hungry for any food, will eat little, then will go back to the juice when hunger kicks in again after the meal is over.

The consumption of of juices and sodas which are introduced at a very early age, becomes an addictive habit.  Dr. David Kessler, former chief of the Federal Drug Administration has recently written a book entitled The End of Overeating in which he describes the bio-physiological dependence that human beings can easily develop for fat, sugar, and salt – all elements that were important for survival in far earlier days, but which now have limited survival benefit.  By the time a child is 12, he/she is addicted not only to the sugars in the fruit juices and soft drinks, but has formed social habits – such as drinking a Coke with friends at recess, after sports, on the job – which are equally hard to break.

Therefore, on the surface, any attempt to limit the amount of sweetened drinks is a good idea; but the overtly intrusive and perhaps illegal attempts of a government to force these changes on individuals are wrongheaded and illustrative of the persistent view in America that government knows best.  The focus on supersized drinks bears no relationship to the roots of obesity, the ability of anyone to easily skirt the law and purchase any quantity of sweetened beverages; and most importantly avoids putting the onus of responsibility where it belongs – on the individual.

One of the dumbest laws on the books is the one in DC which forbids any customer to purchase alcohol from a supermarket before 9am – an attempt by the DC Government to demonstrate that it recognizes alcohol abuse as a problem.  What could possibly be the positive effects on alcohol behavior?  Will I really reduce my alcohol consumption if I cannot get my bottle of Cabernet Sauvignon at Safeway until 9?  Perhaps if government prohibited all alcohol sales on Sunday as it once did in the days of the Blue Laws, then consumption might go down, but a two hour delay (supermarkets generally open at 7)?

When I travelled frequently to India a number of years ago, I encountered an even more stupid law.  There were so-called ‘dry days’ – one day a month where alcohol could not be sold.  Again, what could that now repealed act have possibly done other than show the more conservative elements of the electorate that something was being done.

In the same arena of sin and vice, gaming establishments are not permitted in the territory of Mississippi; but they are allowed off-shore; so the huge and hugely profitable casinos in Biloxi and Tunica float a few feet from the beach or riverside.

In short, this attempt to ban supersize drinks is no more than political grandstanding.  The law will never pass, but it sends a message to Bloomberg’s constituents that he is one of the few big-city politicians to stake a claim for the nation’s health.  There are many practical reasons why the idea will not work.  First, fast-food restaurants will quickly adapt and since soft drinks cost almost nothing to produce but are in high demand, and McDonald’s is likely to offer “Two-for-one giant-sized drinks with every Happy Meal”.  The giant-sized drinks would be at the 16oz. maximum, the company would get the same allegiance as they did because of the ‘generous’ supersized drinks; and while consumers might not like to fuss with two containers in the car instead of one, the cheap deal will always win out.  People who buy their drinks from bodegas and other establishments can more easily carry two-for-one drinks. If theaters are limited on the size drinks they can sell, they can offer free refills, and throw in “free” candy bars with their large-soda purchases. 

Second, the law conveniently excludes vending machines.  Since the proportion of daily soft drinks consumed at the workplace is high; and because most of these workers get them at vending machines, consumption is not likely to be affected. 

Third, Bloomberg ignores the statistics about soft drink consumption.  CDC estimates that over half of all soft-drink consumption occurs at home.

Therefore, if over 50 percent of soft drinks are consumed at home; and if a significant proportion are consumed at work and school via vending machines; and if two-for-one pricing becomes the norm and consumers easily adjust to it, then the supersized restriction makes little sense.

A less imperious intervention to the question of soft drinks is to tax them by size. Most products are price-sensitive and there has been a decrease in smoking based on the price-per-pack.   If a consumer wanted to purchase supersize drinks, he would have to pay more for it.  However, as suggested above, the cost of producing sodas is so low that the free refill or two-for-one options, restaurant/theatre/ballpark establishments could easily evade the law.  Too high price-per-pack encourages inter-state sales and eventually black markets, and restrictive taxation on soft drinks would only encourage tax evasion.

Even if this law and other coercive laws were to be enforced and work, who is to say that another addictive, calorie-laden alternative would not replace it?  No one has shown that drinks per se are the problem – they are simply a convenient sweet calorie delivery mechanism.  Instead of drinking supersized sodas, administrative assistants in offices might be nibbling on supersized, long-lasting candies which would deliver not only sugar but fat and salt as well.  Who doubts the ability of American marketers and advertisers to shift the market share?

There is one sign that non-coercive, punitive market forces are at work – the consumption of soft drinks is going down in the US, largely due to the increasing concern about health and obesity:

Carbonated soft drink consumption in the US last year fell to its lowest level since 1996, the latest industry figures showed on Tuesday, highlighting the predicament Coca-Cola and PepsiCo face as they invest in their flagship cola brands.

According to data from Beverage Digest, total carbonated soft drink volumes fell by 1 per cent year-on-year in 2011 to 9.2bn cases, declining twice as fast as they did in 2010.

Volumes have declined every year since 2005, as consumers shift increasingly to bottled water, juices and teas. Carbonated soft drink volumes grew by about 3 per cent per year through the 1990s, before slowing at the turn of the century and slipping six years ago. (Financial Times)

These figures do not tell the whole story, however.  Although some of the shift is to bottled water, most of it presumably is to sweetened juices and teas; and thus the total caloric benefit may be lost.  At the same time, the data show that consumers are at least paying attention to the volumes of information produced about the ills of soft drinks, poor nutrition, and obesity, suggesting that some shift in nutritional norms might be taking place.

The real issue, however, is how much government coercion should occur in the area of health practices?  The answer lies in a further question: Does the government have a compelling interest in reducing obesity when it effects public welfare; and more specifically does obesity cause a rise in government expenditures or declining economic productivity?

There is no doubt that obesity is related to disease and premature death; and that it is positively correlated with poverty.  Since under our current healthcare system, people with no health insurance are forced into public programs, then government has a compelling interest in reducing obesity.  Second, if obesity-related illness causes a decline in worker productivity due to days lost, inefficient labor, and higher private insurance costs, an argument can also be made for a compelling interest.  Government, then, has a right and obligation to raise taxes, pass laws, and put other obstacles in the way of non-nutritious foods. 

Others would say that while there is a compelling interest in reducing obesity, it is that of civil society – individuals, families, private associations, and the private market – not the government.   In other words, let civic-minded groups accelerate their campaigns to improve nutrition and let this encouragement translate into more bottled water, as above.  People are responsible for their own destiny, the argument goes, and until normative change occurs (lower smoking rates, cleaning up dog shit, seatbelt use, etc.), many will continue to be excluded from the benefits of an improved diet.

As suggested above, there are only two principal ways that government can intervene – through taxes and restrictive laws.  The history of anti-smoking efforts have shown that it is not easy to ban, outlaw, or restrict a legally-available product; and it is quite likely that the Bloomberg attempts will fail.  He will argue that he is not outlawing soft drinks, just attempting to limit portion size; but that limits free choice on a legal product.  As has also been suggested above, taxes can more easily be avoided than those on cigarettes or alcohol, for there is such a variety of alternative options.

Since the reasons for obesity are so socio-economically related (wealthy families have lower levels of obesity, mortality, and morbidity than the poor), and since government is limited – especially in these days of financial constraint – in its ability to affect poverty; then addressing systemic issues is really not now possible.

In conclusion, since taxes and legal coercion cannot work; and since systemic change in the socio-economic determinants of obesity are unlikely; and since the country is now more than ever very much against government intrusion into personal life; then only the private interventions of civil society can have any impact.

Mayor Bloomberg is grandstanding for sure, no less that Congressmen who frequently back a ridiculous position when they know it will fail when it comes to a vote.  However, he has helped to focus even more attention on obesity.  Whether he has set back the attempts to address it rationally or not, only time will tell. 

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