$137.8B U.S. ad spend for top 200 advertisers
A couple of U.S. senators are making a new attack on the the long-targeted ad tax deduction, and this one goes squarely after the food and beverage industries.
Tom Harkin, D-Iowa, and Richard Blumenthal, D-Conn., have introduced a bill called the "Stop Subsidizing Childhood Obesity Act," that would prohibit deductions of expenses from the advertising of foods and beverages of "poor nutritional quality" that are marketed to kids. The proceeds would go to a government program that provides fresh fruit and vegetable snacks to low-income school children.
"This measure makes taxpayers allies of health advocates and nutritious eating, rather than aiders and abettors of junk food," Mr. Blumenthal said in a statement.
But the bill -- which is strongly opposed by the ad industry -- lacks some important specifics. It could also face an uphill fight because the food industry has proven successful in thwarting other proposals aimed at growing the government's influence in kids food marketing.
Dan Jaffe, exec VP-government relations for the Association of National Advertisers, which opposes the bill, agreed that the odds are against passage. A similar bill that was introduced in the House last year remains stuck in a committee. But ANA is taking the new threat seriously, Mr. Jaffe said, noting that Mr. Harkin and Mr. Blumenthal have clout.
The ad industry has long fought attempts to eliminate the ability of companies to deduct ad and marketing expenses. ANA fears the Harkin and Blumenthal bill would set a precedent for targeting specific expenses. "You open this door and I can assure you, there will be a tremendous number of people trying to rush through it," Mr. Jaffe said. He added that such carve-outs would cause "immense complexity to carry out."
The senators are making an anti-obesity appeal, saying in a statement that the bill would "remove an incentive for food and beverage companies to market unhealthy food to children, and encourage them to use their creativity and resources to encourage children to make healthy eating decisions."
But the bill does not specify which foods would be considered unhealthful. Rather, it would direct the nonprofit Institute of Medicine to create procedures to identify the targeted foods, candy and beverages.
The legislation defines a child as under the age of 14. That is a broader classification than the industry-led Children's Food and Beverage Advertising Initiative, which sets criteria for foods that are not allowed to be advertised to kids under age 12.
Elaine Kolish, the group's director and VP, said self-regulation works better than government involvement because it is "faster and it's more flexible." She said that is "very important in an area where nutrition science is evolving all the time."
The voluntary group includes 17 major food and drink marketers -- including McDonald's USA, PepsiCo, General Mills and Kraft Foods Group -- that accounts for about 80% of child-directed TV food advertising.
The organization recently tightened its nutrition guidelines and for the first time began enforcing the same nutritional standards for all of its members, rather than letting companies pick and choose their own rules.
The new rules -- which took effect in January -- were first announced in 2011, just as the Obama administration was pushing a stronger proposal that advertisers complained would pretty much shut down kid-oriented ads for most foods.
The government effort, called the Interagency Working Group on Food Marketed to Children, later died.