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Beverage giants offer city $5 million prize to avoid new tax

Mayor Rahm Emanuel talks about City Chicago's Wellness Program how beverage companies are launching 'Calories Count Vending Program' by putting

Mayor Rahm Emanuel talks about the City of Chicago's Wellness Program, and how the beverage companies are launching the "Calories Count Vending Program" by putting calorie information on every can, bottle or pack sold giving consumers a clear choice in their caloric intake. standing behind Mayor Emanuel are American Beverage Association President & CEO Susan Neely, President & CEO of Coca-Cola Steve Cahillane, President of Beverage Concentrates, Dr. Pepper Snapple Group Jim Johnston and President PepsiCo Foodservice Tom Bene. Monday, October 8, 2012 | Brian Jackson~Sun-Times

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Updated: November 10, 2012 6:12AM

The beverage industry is offering Chicago a $5 million carrot and calorie counts on city vending machines to avoid the stick: a tax on sugary beverages proposed by an influential alderman or a New York-style ban on oversized beverages.

Beverage giants are promising a $5 million prize to the winner of a head-on competition between city employees in Chicago and San Antonio to determine which work force can best improve their “wellness” profile.

Individual employees who make the greatest improvements — on still-to-be-determined factors expected to include weight loss, reduced blood pressure and efforts to stop smoking — will also be eligible for $1,000 cash bonuses.

The vending machine industry also plans to launch a so-called “Calories Count” program to increase the availability of lower-calorie beverages in city vending machines; display calorie counts for each vending machine choice and display a “Calories Count” logo on each machine to remind consumers to make smart choices.

Susan Neely, president and CEO of the American Beverage Association, made no bones about it.

The beverage industry hopes that, by forging a partnership with Mayor Rahm Emanuel, it can avert the more dire solutions proposed in Chicago and already imposed in New York.

“In addition to having the calorie label on every can, bottle and pack, you have it right there on the selection button. So, pick what’s right for you,” Neely said.

“We think these kinds of things are gonna get a lot further faster than bans or fights over discriminatory taxes, which there is research after research which says they will not work,” Neely said. “They will not change behavior. Even if you would mark up a product or tax it 100 percent, you’re not gonna reduce body mass index.”

Steve Cahillane, president and CEO of Coca-Cola Refreshments, added, “Over the course of the last 10 years, calories from sugar-sweetened beverages have gone down 39 percent. At the same time, obesity rates have gone up dramatically,” underscoring his contention that the punitive approach doesn’t work.

Cahillane added, “Sugar-sweetened beverages on average are about seven percent of the diet. Because we’re part of the diet, then of course we’re part of a problem. But, it’s a broad problem — and it’s energy balance: Calories in, calories out.”

At a City Hall news conference with the beverage titans, Emanuel made it clear he prefers the carrot to the stick.

“If the six chronic illnesses that you know — whether it’s hypertension, blood pressure, weight, smoking — if you basically put aside personal responsibility, you’re missing the core ingredient for improving health care outcomes,” the mayor said.

Earlier this year, health advocates and retailers squared off on a plan proposed by the chairman of the City Council’s Health Committee to curb soaring obesity rates by taxing Chicago consumers of soda pop, energy drinks and other sugary beverages — by anywhere from 15 to 30 cents a container to a penny an ounce.

Ald. George Cardenas (12th) wants Chicago to follow the lead of 33 states that already impose a sales tax on sugary beverages. Six other states slap an “excise taxes in addition to a sales tax.” A Chicago tax would have to be authorized by the Illinois General Assembly.

On Monday, Cardenas said he’s all for the incentive-based program proposed by the mayor and the beverage industry. In fact, he said it “should have been done a while ago.”

But, Cardenas said he’s not willing to bury the idea of a tax on sugary drinks just because beverage giants are dangling a $5 million reward.

“The jury is still out in terms of what else we can do,” Cardenas said.

“Whatever is working in New York or other places, you can never leave off the table. It’s a large problem we have to deal with. You’ve got to keep your options open.”

The wellness challenge between Chicago and San Antonio is expected to run for three months, beginning Jan. 1. Calorie counts on beverage vending machines located in city buildings will debut early next year.

City employees who refuse to participate in the wellness program to manage chronic health problems will see their monthly health insurance premiums rise by $50.

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