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France’s 2012 Resolution: Drink Less Soda

Or pay more money. The country joined the ranks of countries and states combating obesity by increasing the cost of soda. Will it have more of an effect on French waistlines or wallets?

France’s 2012 Resolution: Drink Less Soda
Francois Schnell

Well, 2012 should be a slightly healthier year for the French. The country just passed a new soda tax with the aim of reducing obesity rates and increasing state revenue.

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The new tax was announced in August and then passed in parliament and approved by the Constitutional Council in December. It went into effect on January 1 and works out to one euro cent per can of soda (it also applies to other sugary drinks like Orangina). It is expected to bring in about $156 million in revenue.

Some drink industry sources have told newspapers that soda prices could increase by as much as 35%, but that high quote could just be the industry trying to scare consumers.

But soda prices are likely to increase by some amount, and that should have a positive effect on the country’s rising obesity rates, because soda makes you fatter. According to a 2009 UCLA study, California adults who drink at least one can of soda per day are 27% more likely to be obese than those who drink less. There’s a mountain of research refining and qualifying the soda-obesity link, but no one is pretending that these drinks–which have an average of 10.2 teaspoons of sugar per can and about zero nutritional value–make you any skinnier. And the obesity-mortality link is very solidly established.

This kind of soda tax has already been applied elsewhere in Europe and in several U.S. states, including Maryland, Virginia, and Washington. They’re vigorously opposed by the sugar water industry because those companies care more about keeping their product cheap than keeping you svelte. The new tax in France was no exception. Coca-Cola called off a roughly $22 million investment in a French plant in protest.

So, you can think about this tax as heavy-handed government interference or you can think about it as the pricing of important negative externalities (obesity and its related health problems) into the price of unhealthy drinks. Either way, France’s budget and populace will both be in at least marginally better shape for it.

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