Tag Archives: Coca-Cola

You’re as Kold as ice

Keurig Green Mountain, the local startup made good and then assimilated by Coca-Cola, has formally unveiled its new Keurig Kold system online. To me, it still looks like an Edsel in the making. What’s worse, the troubled company is clearly betting the farm on this overpriced gizmo.

The cost alone is a deal-breaker. Add to that the machine’s clunky performance, and you have a product fated for the dustbin of history.

Cost? The list price of a KK is $369 — by far the most expensive of any Keurig device. But that’s just the entry fee. Your $369 buys you the opportunity to make little tiny eight-ounce servings of cold beverages at a per-cup cost of more than a dollar.

And each serving takes more than a minute to produce.

Which begs the question: why in hell would anyone buy this piece of junk?

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The Bag Man carries a heavy load

Listening to Jim Harrison on VPR’s Vermont Edition last Friday led me to one inescapable conclusion: as a public debater, he makes a mighty fine bagman.

Harrison, for those with a bliss-inducing level of ignorance about Statehouse matters, is one of the most effective lobbyists in Montpelier. Harrison heads the Vermont Retail & Grocers Association, and his current bête noire is the proposed two-cents-per-ounce tax on sugar-sweetened beverages.

The recommended daily allotment of sugar is 8 teaspoons for a male adult, 6 for a female adult, and 2-3 for a child.

The recommended daily allotment of sugar is 8 teaspoons for a male adult, 6 for a female adult, and 2-3 for a child. So go ahead, kids: Enjoy your daily two ounces of Coke!

Harrison appeared on VPR with the chief pro-tax lobbyist, Anthony Iarrapino of the Alliance for a Healthier Vermont. Harrison’s presentation was pretty much all over the place: he’d shift from one prehashed talking point to another with not even an attempt at segue, he pulled trusty (and rusty) anecdotes out of his back pocket; he’d throw multiple talking points into a single answer, making it impossible to examine them closely. His overall approach could be summarized as, “Throw everything at the wall and hope something sticks.”

If you summed up all his various statements, it’d go something like this:

— The tax will do nothing to change behavior.

— The tax would be the death knell for countless independent businesses.

— Soda consumption is already trending downward, so we don’t need a tax.

— The tax won’t work because people will just shop where the beverages are cheaper (i.e. New Hampshire).

— There is “no comparison” between tobacco and sugary drinks. So the success of the tobacco tax at reducing smoking says nothing about the potential impact of a beverage tax.

Is your head swimming from all the contradictions? It should be. But I feel for Harrison, because he’s basically defending the indefensible: the right to sell grossly unhealthy drinks at the lowest possible price. When, in reality, sugary beverages are artificially low in price because the corn and sugar industries benefit vastly from federal handouts and favorable tax policy.

Harrison’s favorite argument boils down to “We’ve got to compete with New Hampshire.” There’s so much to say about that old canard, I’m going to tackle it in a separate post. For now, let’s focus on Harrison’s other recurring theme: It Won’t Work.

“This is a social experiment. No other state has done anything like this.” True enough, but we do happen to have a wonderful example of a sugary-beverage tax at work. On January 1, 2014, Mexico imposed a one-peso-per-liter tax (about 7 cents) on sugary drinks. The move came in response to rapidly climbing rates of obesity and diabetes. The results? A University of North Carolina researcher is working with Mexican officials on that question, and here’s what they found:

… preliminary results show that during the first three months of 2014, purchases of sodas and other taxed beverages declined by 10 percent compared to the same time period last year.

Meanwhile purchases of untaxed drinks, like 100 percent fruit juice and milk, went up 7 percent, and purchases of bottled water went up 13 percent.

If that’s not enough, the Wall Street Journal reports that a survey of Mexicans found that they are drinking fewer soft drinks, and are more aware of the link between sugary beverages and health problems since the tax was imposed. Another survey indicated that more than half of all Mexicans had cut back on sugary drinks.

Also, Coca-Cola’s biggest Mexican bottler reported a 6.4% sales drop in the first half of 2014 compared to the same period in 2013.

Those are impressive results for the early days of a relatively small tax. Vermont’s would be eight times as large. Imagine the impact it would have on sales of sugary drinks. (Again, I’ll deal with the cross-border argument in a later post.)

As for the comparison with the tobacco tax, Harrison really didn’t have an answer. The tobacco tax has, indeed, helped to drive down smoking rates. He didn’t try to argue that point; he simply bristled at the notion that tobacco and sugary drinks are in the same category.

Well, obviously, they’re not. They’re closer than Harrison would like to admit, but tobacco is clearly a bigger health threat. However, the real comparison isn’t “how bad is it for you?” It’s “Will a tax reduce demand?” On that question, the success of the tobacco tax is strong evidence that a beverage tax will work. Just in case Mexico isn’t enough for you.

Whenever Harrison is fighting a fee, tax, or regulation, he brings out the mom-and-pop types who are, as he puts it, constantly teetering on the brink of oblivion. “Most of our members are smaller, independent stores,” he says. That’s true if you count every store as one. But if you count total sales, the supermarket and megamart chains far outweigh the small independents.

And it’s not the moms and pops who put up the $600,000-plus spent on defeating a sugary-beverage tax in 2013, and are spending hundreds of thousands more this year. No, that money comes from Big Retail and Big Beverage. The moms and pops are politically convenient props.

Harrison also cited some statistics showing that soda sales have trended downward in recent years, and used that fact to question the link between sugary drinks and rising rates of obesity and diabetes. The problem there is, not all sodas are sugary (DIet Coke, et al.) and not all sugary drinks are sodas. And while it’s true that soda sales are dropping, sales of non-carbonated sugary drinks are through the roof: energy drinks, sports drinks, “juice” drinks containing very little juice, sweetened iced tea, etc.  It’s not just soda that represents a public-health threat; it’s the vast cornucopia of sugar-laden beverages on the market.

There were many more points in Harrison’s presentation. Each of them sound plausible when presented in a rapid blur of talking points, but all are full of holes when inspected more closely.

Coming soon to this space: “The New Hampshire Chimera.”

Sweet deals, or no deals?

The 2015 legislative session looks to be big and contentious, including the likely rollout of Governor Shumlin’s single-payer health care plan and a serious debate over public-school organization and financing. We can also expect a new battle over campaign finance reform, VPIRG’s #1 issue for the year.

And there will be a new fight over taxing sugar-sweetened beverages, a measure that has failed twice in recent years. But a new year, a new push, and a new guy taking leadership: Anthony Iarrapino is leaving the Conservation Law Foundation to head the Alliance for a Healthier Vermont, the coalition that spearheaded the sugar-tax fight in 2013. Iarrapino told VTDigger, in the words of Bullwinkle T. Moose, This time for sure.

“We’re going to have the resources this time around to really mobilize and educate the public and policy makers on the wisdom of Vermont once again leading the nation in an important policy area,” he said.

The Alliance claims to have $200,000 to bankroll its campaign and counter the efforts of Big Food and the ever-vigilant Vermont Retail and Grocers’ Association. It also seeks to piggy-back on health care reform, by offering a short-term revenue boost from the tax and the longer-term cost reductions from lower rates of sugar-induced illnesses.

It’ll be interesting to see how Governor Shumlin plays this. (Yes, I’m assuming his re-election. Aren’t you?) He can surely use every bit of money he can find for single-payer; but he’s opposed this tax in the past, and his campaign is getting heavy support from the likes of Coca-Cola.

But I would be Shocked, Shocked, if there were any quid pro quo involved.

Jim Harrison of the Retail Association is dusting off his talking points, including the hardy perennial “a tax would hurt retailers near New Hampshire.” Yeah, well, it might hurt big supermarkets within shouting distance of the border, since a 2-cent-per-ounce tax adds up if you’re buying a 30-pack of Mr. Pibb. I doubt it’ll impact our cherished Mom and Pop enterprises; hard to see too many folks driving across the border if they’re just stopping in for a quick Gatorade fix.

But Harrison’s biggest laugh line was this:

Nothing has changed since previous efforts to pass the tax, adding that it’s still regressive and “goes down the path of government trying to decide what’s best for consumers through tax policy,” Harrison said.

Bwahahahaha. Stop it, Jim, you’re making me shoot coffee out my nose.

You kiddin’ me? Government uses tax policy ALL THE TIME to “decide what’s best for consumers.” Take the mortgage interest rate deduction or the charitable contributions deduction. Take any stinkin’ tax deduction, break, subsidy, or exception. Take the capital gains tax rate, which decides it’s better to be a rich investor than a working stiff.

And if you just want to talk about sweeteners, well, that’s the mother lode of government using tax policy to “decide what’s best for consumers.” Agribusinesses that produce sugar and corn benefit from extremely generous subsidies, price supports, and free “insurance.” The result is lost tax revenue for the public till, a farm system that’s heavily skewed toward the biggest producers and commodity crops that go into junk food of all kinds, and — pay attention, Jim — higher cost for consumers because of artificially high sugar, corn, and soy prices.

So please don’t insult our intelligence with that “government shouldn’t decide what’s best for consumers” nonsense. That ship sailed a very long time ago.

Anyway, it should be an interesting battle. I expect legislative leaders to trot out the old reliable “too many other issues on our plate” line, in an effort to put off consideration of the sugar tax. It’ll be up to the likes of Iarrapino to make it a fight they can’t postpone. As we saw with the GMO labeling bill this year, it’s possible to build momentum behind an issue that lawmakers might prefer to duck, but it takes a concerted effort.

And it’ll require a softening of Shumlin’s hard-line stance. Not an easy thing to accomplish.

Shumlination

Might seem like an oxymoron, but a radio guy has created the second-best visual representation of Governor Shumlin’s fundraising power. (VPR’s Taylor Dobbs by name.) It’s a simple bar graph: Shumlin’s money totals are indicated by two impressively erect columns reaching for the sky; Scott Milne’s are two thin smears on the bottom line.

I say “second-best” because the best comes from the legendary cartoon “Bambi Meets Godzilla.”

BambiGodzilla

There are a couple of big takeaways from the size of Shumlin’s warchest: (1) He came into 2014 with enough money to virtually guarantee re-election. He’ll exit 2014 with enough money to virtually guarantee victory in any race he chooses to enter for at least the next four years. And (2) It’s not Lenore Broughton who’s responsible for bringing big money into Vermont politics. It’s Peter Shumlin. And Peter Welch and Patrick Leahy and Bernie Sanders.

Oh, and (3) a very interesting collision is shaping up for the 2015 legislative session, with VPIRG focusing its energy on campaign finance reform and our top Democrats greatly benefiting from the system as it is.

Let’s go deeper, shall we?

First point: Shumlin departed the 2012 campaign having spent only $346,000 to beat Randy Brock. He had a surplus of $915,000. Which meant he started 2014 with basically a million-dollar head start. That’s more than had ever been spent in any state-level campaign in Vermont with, I believe, three exceptions: Jim Douglas in 2008, and Brian Dubie and Peter Shumlin in 2010.

He had a huge lead. And he has continued to raise money. And to spend very little of it. Chances are, he’ll exit 2014 with an even larger kitty — it wouldn’t surprise me if he has $1.5 million in the bank on December 31. If he tries at all, he could make it $2 million or more.

(Scott Milne has talked of Vermonters becoming fatigued by campaigns that cost $2-3 million. Which misses the point because while Shumlin’s campaign might possibly raise that much, it’ll spend only a tiny fraction of that. This will not be anything like a $2 million campaign. It may not even top a half mill.)

Which gives him an even bigger edge next time around, and ensures that he will be a prohibitive favorite for re-election in 2016 and beyond — or, if he decides to run for something else, he will be the prohibitive favorite for that race.

Unless, of course, he has to run against Peter Welch for any Senate seat that might open up between now and 2020. (Safe to assume Shumlin wouldn’t challenge Pat Leahy or Bernie Sanders, right?) Because Welch has even more money on hand, and even less reason to spend any of it.

My conclusion: the only reason Shumlin is raising money at all is to (a) make it prohibitive for anyone to run for Governor as long as he’s in office and (b) block out any potential competition for a future Senate race.

Bringing me to point #2. Lenore Broughton did her best to influence the 2012 election by spending a million bucks on Vermonters First. It was a complete flopperoo, and if her latest finance filing is any indication, she has no plans to repeat the experiment. Her case is incessantly cited by top Democrats as a rationale for campaign finance reform, but she was an outlier. And a failed outlier at that.

The real, structural change to the financing of Vermont politics is that our Governor and our members of Congress have taken fundraising to a whole new level. They are drawing from the bottomless pool of money at the national level, while everyone else in Vermont is still playing at the state level.

This fact hit home for me when I looked at the latest filing from the Coca-Cola Nonpartisan PAC for Good Government. It’s 29 pages long! The typical filing by a state-level PAC is more like five or six pages. In terms of money, it’s the difference between the Vermont Lake Monstera and the New York Yankees. And, to stretch the analogy further, that’s the field Shumlin et al. are playing on.

So if you want to complain about the influx of money into Vermont politics, don’t complain about Lenore Broughton; complain about Peter Shumlin, Pat Leahy, Peter Welch, and yes, Bernie Sanders. No one, Republican, Democrat, or Progressive, could hope to mount a competitive race when the incumbents have such an overwhelming advantage.

Third, VPIRG’s annual summer outreach program is about campaign finance reform. Last summer’s was about GMO foods, and it set the stage for easy passage of a GMO labeling bill this year. If you read the polls, campaign finance reform is a popular cause, just as GMO was. How will Shumlin and the Dems react when VPIRG drums up a groundswell of public support for a ban on contributions by corporations and lobbyists? Should be an interesting legislative battle in the new biennium.

Unlike many of my friends on the left, I don’t see many signs that the money is having a corrupting effect on the Administration. But it sure does look bad, especially when the Governor does something like strongly opposing a tax on soft drinks and then rakes in thousands of dollars from Coca-Cola, as the Burlington Free Press’ Terri Hallenbeck Tweeted today. I will say this: if you believe Shumlin is being corrupted by big money, what about Pat Leahy and Peter Welch? (I’ll give Bernie a pass on corporate donations, since he’s gotten most of his money in small amounts from individuals. But he’s still playing with millions, while most Vermont politicians get by with a few thousand at most.)