Coca-Cola Joins Fight Against Obesity: Which Side Is It Really On?

A frame from Coca-Cola's anti-obesity ad, "Coming Together"

The world’s largest purveyor of sugary drinks has made an unprecedented public embrace of its own culpability in America’s struggle with obesity and the costs associated with an overweight population.

A new video released by Coca-Cola to considerable buzz bluntly labels obesity the “issue of this generation” and makes a vague admission that calories from its products could be contributing to the unhealthy lifestyle of Americans.

But many critics claim the beverage giant’s new ad campaign is just a public relations stunt designed to deflect attention from its role in the obesity epidemic, especially among children frequently targeted by the company’s more robust and pricey pro-Coke marketing efforts. Sugary drinks account for the bulk of obesity-causing calories consumed by Americans every single day.

With more and more Americans overweight or obese every year, and with the health care costs linked to these conditions a main driver of the debt and deficit now being argued about on Capitol Hill, Coca-Cola generated buzz with a startling new ad campaign acknowledging both the gravity of the nation’s obesity crisis and the role its own products play in allowing Americans to easily pack on excess pounds.

A two-minute video entitled “Coming Together” is the first part of the company’s rehabilitation effort, gaining headlines for tackling the obesity crisis head-on but making few promises to change its marketing tactics and touting how healthy many of its products are.

THe most controversial aspect of the ad is its tagline that “all calories count,” a sentiment pushed aggressively by the food and beverage industry anxious for Americans to continue to consume their (mostly unhealthy) products but a theme rejected by most doctors and nutritionists as archaic and scientifically false.

“All calories count”  is a theory that will likely become the front line in the battle over obesity that will pit major corporations like Coca-Cola, acknowledging a weight crisis but determined to protect profits, against nutritional experts and health crusaders unfazed by slick marketing and branding campaigns.

It’s a statistic we’ve been hearing far too often — and for far too long. Two-thirds of American adults are either overweight or obese — and the problem is only getting worse.

Even Coca-Cola, the world’s largest beverage company, is now calling obesity “the issue of this generation.”

The world’s most valuable brand took the last seat at a crowded table Monday, when it launched an ad campaign aimed at “reinforcing its efforts to work together with American communities, business and government leaders to find meaningful solutions to the complex challenge of obesity.”

The first commercial of the campaign, a two-minute video called “Coming Together,” begins with a voice-over: “For over 125 years, we’ve been bringing people together. Today, we’d like people to come together on something that concerns all of us: obesity.” The spots are scheduled to run on television, including CNN, beginning this week.

 Coca-Cola points out in the video it offers 180 low- and no-calorie beverages out of more than 650 beverage products.

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In its new campaign, Coca-Cola drives home the sentiment that “beating obesity will take action by all of us, based on one simple, common-sense fact: All calories count, no matter where they come from. … And if you eat and drink more calories than you burn off, you’ll gain weight.”

Response to the new ad and the overall shift in Coca-Cola’s marketing efforts from obesity experts and consumer advocates has been immediate and sharply critical. They call it a “public relations move” from a company that “remains one of the major causes of obesity” in the US.

“The Coca-Cola Company still remains one of the major causes of obesity in the USA and globally,” says Barry Popkin, a nutrition professor at the University of North Carolina-Chapel Hill and one of the nation’s top experts on beverage consumption. “Yes, other foods matter, but the biggest single source contributor to child and adult obesity in the USA is sugar-sweetened beverages.”

Michael Jacobson, executive director of the Center for Science in the Public Interest, a Washington, D.C.-based consumer group, says the new ad “is a page out of Damage Control 101, which is try to pretend you’re part of the solution rather than part of the problem.

“This is a public relations move to assuage public concern at a time when they are being attacked from every direction. Legislators are proposing taxes on sugary drinks, schools have kicked out full-calorie soft drinks, and New York City is imposing a size limit on soft drinks served at restaurants. The public is beginning to understand that in the volume soda often is consumed, it’s a harmful product,” Jacobson says.

What even the food and beverage industry can no longer contest is that obesity is a national crisis that is weighing on every aspect of American life, from how much gas we use, to the rising price of health care, to the size of the federal deficit. With two-thirds of the adult population overweight or obese and a substantial percentage of children trending in the same unhealthy direction, obesity is a long-term crisis that will not be solved quickly.

Even more eye-popping than the number on the nation’s scales is the cost associated with a majority overweight population. Health care spending related to obesity are just under $200 billion – and trending upwards. Not included are the billions of dollars in other weight-related costs, from using more gas to transport heavier drivers and passengers to changing the layouts of public schools to fit overweight students.

With Congress and the White House currently embroiled in disputes over how to address the nation’s debt, it would seem reasonable to assume that such highly preventable costs as those associated with obesity would be a priority for Capitol Hill and government policymakers.

But even as health costs rise along with government spending deficits, lawmakers have actually pushed hard against any attempts to curb weight-related costs and blocked numerous efforts to help Americans slim down.

Stoked by campaign contributions from agribusiness, wooed by food and beverage lobbyists and intent on protecting their constituents from “big government,” Congress has either defeated or reversed various attempts at regulations and changes to government farm subsidies with the intent of promoting a healthier diet for kids and overweight Americans. Congressional action has protected the industry from government oversight and even gone so far as to label pizza a “vegetable” in order to keep it on school lunch menus.

Equally complicit in Washington’s failure to address obesity has been President Obama. While first lady Michelle is widely known for her public campaign to battle childhood obesity, the White House has been “wobbly” in acquiescing to special interests and Congress as they fight for the right to pour more calories into every American.

In the political arena, one side is winning the war on child obesity.

The side with the fattest wallets.

After aggressive lobbying, Congress declared pizza a vegetable to protect it from a nutritional overhaul of the school lunch program this year. The White House kept silent last year as Congress killed a plan by four federal agencies to reduce sugar, salt and fat in food marketed to children.

And during the past two years, each of the 24 states and five cities that considered “soda taxes” to discourage consumption of sugary drinks has seen the efforts dropped or defeated.

At every level of government, the food and beverage industries won fight after fight during the last decade. They have never lost a significant political battle in the United States despite mounting scientific evidence of the role of unhealthy food and children’s marketing in obesity.

Lobbying records analyzed by Reuters reveal that the industries more than doubled their spending in Washington during the past three years. In the process, they largely dominated policymaking — pledging voluntary action while defeating government proposals aimed at changing the nation’s diet, dozens of interviews show.

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Industry critics also contend that the White House all but abandoned a multi-agency effort that recommended healthier food be marketed to children, even after First Lady Michelle Obama told a grocery trade group two years ago that food manufacturers needed to “step it up” to protect children.

“I’m upset with the White House,” said Senator Tom Harkin (D-Iowa), chairman of the Senate Health Committee. “They went wobbly in the knees. When it comes to kids’ health, they shouldn’t go wobbly in the knees.”

Even if lawmakers wanted to crack down on the driving forces behind obesity and the nation’s declining health, powerful special interests are well-entrenched in Washington and spending far more on lobbying efforts to protect profits than on feel-good public marketing campaigns to admit a slice of blame for the weight crisis.

New York City introduced the first government-imposed restrictions on large sweet drinks in the nation last year, banning certain sizes of sodas and other forms of liquid sugar. But efforts to enact similar bans or taxes on sugary drinks that experts say would be more effective and fair have gone nowhere.

That failure in thanks to the intense lobbying campaign of companies like Coca-Cola, who joined with their beverage rivals in blocking a proposed “soda tax” in the 2009 health care reform bill that could have saved lives and cut the nation’s deficit. In fact, Coca-Cola has dramatically increased their lobbying budget as the obesity epidemic has worsened, spending tens of millions of dollars in just the last four years to woo lawmakers and prevent any meaningful government action to cut costs and protect kids.

Washington’s affinity for Coke also extends beyond a lax regulatory system to something more akin to direct corporate welfare. Besides the billions in agricultural subsidies that keep the corn syrups that are the predominant ingredient in most sodas and sugary drinks cheap and readily available, Coca-Cola benefits from the loophole-riddled corporate tax system that hundreds of other companies also use to pad their profits.

Coca-Cola’s federal tax bill was an astonishingly low 6.5 percent rate on more than $7 billion in profits in 2010, the last year for which detailed numbers are available. But like many of its corporate brethren, complimentary regulatory polices coupled with a tiny tax bill are not enough for Coca-Cola.

The company’s CEO slammed the US corporate tax code in 2011 — the year after it paid only a fraction of the advertised corporate rate — and demanded lawmakers move to mimic policies found in countries like China.

According to Mike Allen’s “Playbook”—a daily memo of DC conventional wisdom—the biggest story of the day involves remarks by the CEO of Coca-Cola about the horrid US tax structure. Mukhtar Kent says that his company finds it easier to do business with China and Brazil than the United States because of our antiquated and unfair tax code:

“They’re learning very fast, these countries,” he said. “In the west, we’re forgetting what really worked 20 years ago. In China and other markets around the world, you see the kind of attention to detail about how business works and how business creates employment.”

“I believe the U.S. owes itself to create a 21st century tax policy for individuals as well as businesses,” he said. Mr. Kent, speaking on the sidelines of the Clinton Global Initiative conference, hit out specifically at US provisions that tax companies for repatriating cash earned overseas. Coke does not disclose how much cash it holds overseas.

“If you talk about an American company doing business in the world today with its Chinese, Russian, European or Japanese counterparts, of course we’re disadvantaged,” Mr. Kent said. “A Chinese or Swiss company can do whatever its wants with those funds [earned overseas]. When we want to bring them back, we are faced with a very large tax burden.”

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This is shaping up to be a major talking point for lowering corporate tax burdens, akin to the Democrats’ promotion of Warren Buffett’s pro-tax position. So it’s very important to get this straight: in virtually every way, it’s ludicrous to listen to what the CEO of Coca-Cola has to say about federal taxes.

For one thing, Coca-Cola enjoys very low federal taxes, and pays a lower rate than most Americans. According to Citizens for Tax Justice, the company’s current federal tax expense is $470 million, which is only 6.5 percent of the $7.2 billion in pre-tax profits that Coca-Cola reported last year. That’s a pretty rosy rate, and certainly does call for a retooling of the tax code—though not in the way Mukhtar Kent wants. (The company told CTJ they actually paid at a 38 percent rate, but would not release any documentation).

Part of the reason that Coca-Cola pays such a low rate is that it parks profits in overseas tax havens like the Cayman Islands. The company has saved $500 billion in some years by hiding profits there.

Washington’s affinity for Coke also extends beyond a lax regulatory system to something more akin to direct corporate welfare. Besides the billions in agricultural subsidies that keep the corn syrups that are the predominant ingredient in most sodas and sugary drinks cheap and readily available, Coca-Cola benefits from the loophole-riddled corporate tax system that hundreds of other companies also use to pad their profits.