Soda tax?In these times of fiscal austerity, makers of unhealthy foods are a tempting target for taxation. Activists have long targeted companies like McDonald's (MCD), which just yesterday revealed plans to make over the ubiquitous Happy Meal by adding a fruit or vegetable and reducing the amount of fries.

But trimming portions and adding healthier fare to a fast-food chain's menu aren't enough to substantially curb obesity, which costs society about $147 billion a year in medical costs, according to the Centers for Disease Control and Prevention.

Activists say more radical measures are called for -- like levying a 20% surcharge on sugary drinks and other unhealthy foods and using the billions raised from the tax to subsidize healthier foods, such as vegetables.

That's the kind of plan Mark Bittman of The New York Times says he can get behind: "This program would, of course, upset the processed food industry," he writes. "Oh well. It would also bug those who might resent paying more for soda and chips and argue that their right to eat whatever they wanted was being breached. But public health is the role of the government, and our diet is right up there with any other public responsibility you can name, from water treatment to mass transit."

Are the Food Police Putting the Heat on Your Stocks?

It would be wrong for investors to dismiss Bittman as a "Food Police" radical. There are plenty of like-minded people in positions of power pushing for changes that could affect the food industry stocks in your portfolio.

Bittman notes that at least 30 cities and states "have considered taxes on soda or all sugar-sweetened beverages." Soda has become the most-villainized food product of the decade, which is odd given that its popularity is fading.

According to industry trade publication Beverage Digest, soda accounted for 24.9% of liquid consumption in 2010, down from 29.1% in 2000. That's partly because of the rising popularity of bottled water. Despite Coca-Cola's (KO) strong quarterly results, North America volume was flat in the second quarter excluding a cross-licensing deal with Dr Pepper Snapple Group (DPS).

So far, Coca-Cola and PepsiCo (PEP) and their unionized workforces have beaten back soda tax proposals in places such as Philadelphia and New York. State legislators in cash-strapped Illinois are considering a soda tax plan as well.

Other Companies That May Be in the Line of Fire

Soda and fast food are easy targets for the Food Police. But the rest of the food industry may also be vulnerable to attack.

Dean Foods (DF) recently introduced a low-calorie chocolate milk for schools. Some districts, including the Los Angeles Unified School District, the second-largest in the country, have already banned flavored milk as part of their fight against childhood obesity.

What's next? Why shouldn't Hershey (HSY) be assessed a fee by the government for its role in contributing to childhood obesity and dental problems? Should Kraft (KFT) be held responsible for the bulging waistlines caused by Oreos and Kraft Macaroni and Cheese? And Kellogg's (K) Froot Loops might as well be classified as sugar-delivery systems.

The influence of the Food Police is slowly growing and has the potential to wreak havoc on the industry for years to come.


Jonathan Berr does not own shares in the companies listed. The Motley Fool owns shares of Coca-Cola, PepsiCo, and Dean Foods.

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ieyun313

When you buy from the charity, I paid them anyway, but something that you think or say what a good price if the quality is fine magnetic silver zinger? What are you looking for when buying magnetic silver zinger?
Cheers:
http://magnetic-silver-zinger.blogspot.com/

August 26 2011 at 2:23 AM Report abuse rate up rate down Reply
ieyun313

When you buy from the charity, I paid them anyway, but something that you think or say what a good price if the quality is fine magnetic silver zinger? What are you looking for when buying magnetic silver zinger?
Cheers:
http://magnetic-silver-zinger.blogspot.com/

August 26 2011 at 2:19 AM Report abuse rate up rate down Reply
Ray

SUBSIDIES!!!!!!!!! How's that working with the corn prices.............tax and spend even applies in the food and beverage aisles.

July 28 2011 at 10:15 AM Report abuse rate up rate down Reply
kc1920

You are all missing the big point. Go back and read the 3rd paragraph.

>>>Activists have called for levying a 20% surcharge on sugary drinks and other unhealthy foods and using the billions raised from the tax to SUBSIDIZE healthier foods such as vegetables

Subsidies are govt handouts to businesses and corporations. These taxes won't be used to reduce obesity and it certainly won't be used to pay down govt health care bills. These taxes will be handed out to businesses and corporations. The businesses that get these subsidies won't be selling healthy food at a discounted price. They'll be charging full price. The govt is actually going to give businesses money just for serving smaller portions of french fries. Of course the businesses will still charge full price for the smaller portion. This is going to be MORE TAXPAYER FUNDED WELFARE FOR BIG BUSINESSES/CORPORATIONS. This is what everyone should be really angry about

July 28 2011 at 9:27 AM Report abuse +1 rate up rate down Reply
Setanta

tax the parents and guardians for stuffing their kids to a supersize. NOT everybody that goes to mikkieDs or eats junk becomes fat and who the heck goes to mcDOnalds for fruit and veggies ?????

July 28 2011 at 9:14 AM Report abuse rate up rate down Reply
1 reply to Setanta's comment
Setanta

yeah.........I SAID THAT ! TAX THEM and leave the rest of us alone.

July 28 2011 at 9:15 AM Report abuse rate up rate down Reply
you old fart

ANOTHER TAX TO PAY FOR GOVERMENT PARASITES THE BASTARDS WILL TAX RAIN NEXT!!

July 28 2011 at 9:04 AM Report abuse +1 rate up rate down Reply
1 reply to you old fart's comment
Setanta

no need to tax rainwater----remember the professUHs DECLARED CO2 a bleeeeeeeding pollutant ? WHAT DO WE EXHALE ? them and their carbon taxes scatology --

July 28 2011 at 9:16 AM Report abuse rate up rate down Reply
krazzicraig

zzzzzzzzzzzzzz

July 28 2011 at 8:04 AM Report abuse rate up rate down Reply
Lillian

Soda = Crap.

July 28 2011 at 7:03 AM Report abuse rate up rate down Reply
stevecelt

Taxing vices that are pushed on users makes sense.... it's been done for years to help deter the harmful behavior. Of course, the pushers of this sugar water industry will be upset. Pusher Man.... Pusher Man.....stay away from me.

July 28 2011 at 6:49 AM Report abuse rate up rate down Reply
1 reply to stevecelt's comment
Setanta

are you for real ? people are FORCED FED soda and chips ?

July 28 2011 at 9:17 AM Report abuse +1 rate up rate down Reply
steve51517

everyone is saying where are the JOBS, well when you put on more taxes then needed, I don't blame companys for not hiring. lets face it folks. thier is a cause and effect on everything we do. so the next time something is taxed thru the roof, or some company is attacked and sales drop. dont complain when you your family or friend cant find a job...

July 28 2011 at 3:14 AM Report abuse +1 rate up rate down Reply