Natural Foods Merchandiser

What will NYC's obesity tax mean for naturals?

By Cara Hopkins

New York Gov. David Paterson's proposed 18 percent "obesity tax" on sugar sweetened beverages could have unintended consequences for the natural beverage industry, according to one manufacturer. The tax would impose "an additional 18 percent rate of sales and compensating use taxes on fruit drinks that contain less than 70 percent of natural fruit juice and non-dietetic soft drinks, sodas and beverages." The intent of the tax, according to the budget proposal, is to curb obesity by discouraging children and teenagers from excessive consumption of full-calorie sodas.

To support the proposal, New York's state health commissioner, Dr. Richard Daines, posted a video on YouTube in which he states that the average New Yorker's soda consumption has increased from five cans per week to 11 cans per week since 1970. More soda means more calories—Daines states that the additional soda amounts to 13 more pounds of straight sugar, totaling a whopping 21,000 additional calories, per year. "Sugar-sweetened beverages are pretty much just liquid sugar," Daines said in the YouTube video.

How the tax will be assessed has some in the naturals industry concerned. Liz Morrill, founder and CEO of Manhattan-based Fizzy Lizzy, a natural brand of sparkling water-diluted fruit juice drinks, calls the proposed tax "completely irrational" in a statement to members of the New York

State legislature. Morrill points out that her Fizzy Lizzy Tangerine drink, which contains 50 percent juice and 50 percent seltzer and has 24g of sugar per 12-ounce bottle, would be taxed 26 percent, while a 100 percent juice product that contains more calories and has a higher sugar content, would not be subject to the additional tax.

Critics also point out that diet sodas, which are exempt from the tax, often contain artificial sweeteners, flavors and preservatives. "[Diet sodas], which numerous scientific studies have shown actually increase one's yearning for sweets, get a pass but all non-diet carbonated beverages, regardless of calorie and nutritional content, are heavily taxed. So nonsensical is this proposal that it even applies to flavored seltzer containing zero calories," Morrill said in her statement.

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