West Coast legislators are threatening to tax TV ads for foods with low nutritional content. Ofcom’s recent proposals for UK junk food ad controls are fried chickenfeed compared to this radical idea, but will it become law?
California calorie crackdown: advertisers oppose junk food ad tax proposal
Where: the Sunshine State
When: Spring 2006
The largest advertiser trade body in the US has spoken out against proposals by Californian legislators to introduce a tax on television advertisements for foods with a low nutritional content. Policy-makers hope "SB 1118" will address the link between food products and public health issues, such as childhood obesity.
As well as taxing the advertisers, SB 1118 would also impose an additional tax on all food products sold at certain restaurants in California and a tax on carbonated beverages sold at any retailer in California. The bill would impose an excise tax on the purchase, for use by an advertiser, of advertising space in excess of an established amount, for advertisements for food products of poor nutritional quality to be aired within the state of California at a defined rate (as yet undeclared) of the annual gross receipts of the advertiser.
The Association of National Advertisers (ANA), in a letter addressed to Deborah Ortiz, Chairwoman of the California Senate's Health Committee, argues that "Taxes on food advertising would raise very serious First Amendment concerns and likely be struck down in the courts."
The ANA argues that SB 1118 violates US Constitutional free speech guarantees by singling out certain food advertising for taxation based solely on the content of the advertising. They also highlight that there is no authoritative research that shows food advertising to be a cause of obesity.
Concerns have also been raised over the difficulties in administrating and regulating such a tax and whether it could create more bureaucracy than it's worth.
The ANA represents more than 350 US companies with more than 8,000 brands that together spend in excess of $100 billion annually in marketing communications and advertising.
Why this matters:
The proposed tax has been seen as an attack on the advertising industry, blaming it for exacerbating public health problems.
The ANA says that issues such as childhood obesity are complex problems that simplistic solutions cannot effectively address. Policy makers need to consider whether it is it fair for advertisers and in due course consumers to be forced to pay a heavy price for such a broad-based problem. On the other hand, having considered it, they may decide it is perfectly fair given the seriousness of the obesity epidemic.