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Beverage Group Calls New York Tax Proposal a 'Money Grab'

Says Governor's Proposed 'Obesity Tax' Would Hurt Consumers, Risk Jobs

By Published on . 1

NEW YORK (AdAge.com) -- Beverage marketers have little appetite for a new tax on full-calorie soda, and say New York consumers will feel the same way.

New York Gov. David Patterson
New York Gov. David Patterson Credit: AP
At today's Beverage Digest Future Smarts conference in New York, Kevin Keane, senior VP-public affairs at the American Beverage Association, said the organization has reached out to New York Gov. David Patterson's office regarding the proposed tax on full-calorie sodas.

Facing a $15 billion budget gap, the governor included a 15% tax on the sugar-sweetened drinks in a list that included other tax proposals and spending cuts.

Time for belt-tightening
"It looks like a money grab. [Mr. Patterson] is trying to grab money anywhere he can find it," Mr. Keane said. "This is a time when the government, just like families, needs to tighten its belt."

Mr. Keane went on to question the validity of an 'obesity tax' on full-calorie soda, given data that show that obesity rates are rising even as soft-drink sales are flat. He also said the soft-drink industry provides the state with plenty of jobs, including union jobs. PepsiCo is based in Purchase, N.Y., and major bottlers are also based in New York.

"We think that everybody has to keep in mind that we're in a recession, and in an economy like this, the last thing we should be doing is raising taxes on everyday needs like clothing and groceries. That doesn't wash with the consumer," Mr. Keane said. "This has the potential to affect the consumer's checkbook, as well as paychecks. Every time you raise taxes on an industry's product, you put jobs at risk. It's a double whammy."

Tax repealed in Maine
In November, Maine voters reversed and eliminated a tax on all non-alcoholic and alcoholic beverages by a margin of 65% to 36%. "Clearly, taxpayers don't have an appetite for more taxes," Mr. Keane said.

Executives from Coca-Cola and PepsiCo referred requests for comment to the ABA, which they said would be speaking for the industry on the subject.

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