Taxing Sugar and Salt Hurts the People it Aims to Help


By Thomas Walker

Following the introduction by the British government of a tax on sugary carbonated drinks in April 2018, intended to improve public health and combat obesity in children, some campaigners have started calling for similar taxes on a wider range of products.

NHS Chief Medical Officer Prof. Dame Sally Davies, described by the BBC as ‘Britain’s top doctor’, has called [1] for a tax on foods high in salt and sugar, as well as widening the current sugar tax to other types of drinks. The revenue from these taxes, she proposes, would go towards making fruit and vegetables cheaper for the consumer.

Dame Sally makes reference to children and low-income communities as the main beneficiaries of these taxes. Obesity, she says, is a “matter of inequality” that disproportionately affects poorer children and adults. She and others like her hope to make people healthier by discouraging the sale and consumption of unhealthy foods whilst encouraging healthier alternatives.

The most obvious problem with this reasoning is that low-income consumers are the ones who will be hit hardest by the tax. Personal habits, as Bake-off winner Nadiya Hussain points out in her amusing take on the sugar tax [2], are hard to break. Many, if not most, consumers will continue buying the same products as before at the new higher prices, leaving them with even less disposable income to spend on other things.

The fact that the current sugar tax managed to raise £154 million in extra revenue for the government in just six months is suggestive of the reality that consumer habits aren’t changing. In seeking to improve the lives of poorer children and adults the tax has instead simply left them with less money. Expanding the tax to other food and drink products is going to have a proportionately higher financial impact on the poorest people in the country.

Many soft drinks providers have tried to get around the tax by using alternative sweeteners in their products. This may seem like a good solution on the surface, but in reality it can end up being even more harmful. 

The popular sugar substitute aspartame, used in many of these products, has been accused of causing weight gain in consumers by increasing the body’s appetite for it and other sweet foods. It’s possible that artificial sweeteners could ultimately be worse for consumers’ health than the natural sugar they replace.

Expanding the use of alternative sweeteners to other foods and drinks would lead to a huge increase in their consumption at a time when their effects and benefits are still the subject of considerable debate.

Another issue with artificial sweeteners is the difference in taste that can result. Some providers, notably Lukozade, have seen a backlash from consumers over the change in the taste of their products following the introduction of the tax. This can also hurt sales and potentially put companies and jobs at risk.

The issue of taste leads into another significant, but often understated, problem with discouraging sugary food: the effect on people’s happiness. People consume these products because they enjoy them, and for many people that’s done in moderation as part of a balanced overall diet. It’s unreasonable to tell the sensible majority that they have to pay more for their favourite products, or have them fundamentally altered, because of a minority who consume them in excess. 

For children this is particularly pertinent. Sweet drinks and food are an important part of childhood; they create a lot of excitement and make effective rewards for good behavior. But even for adults, energy drinks, sweet snacks and salty foods play an important role in providing moments of relief and pleasure. 

Proponents of these taxes argue that their purpose is to improve the health and wellbeing of people, particularly poor people and children. The reality, however, is that they can end up causing more harm than they prevent in other ways. Wellbeing is not simply a question of diet, but also one of happiness, financial wellbeing and overall quality of life. The people best placed to make balanced decisions about improving their overall wellbeing are the people in question themselves, not the government.

If individual wellbeing is really what the government is interested in promoting, then taxes are not the tool through which to achieve it. Education and information are likely to be far more effective in changing consumer behavior without harming people in other ways. If the government really wants to help people, and isn’t just looking for an easy source of revenue, then they should trust consumers to make their own choices in their own interests, while campaigners should focus their efforts on informing and educating the public to help them make those choices.

[1] https://www.bbc.co.uk/news/health-46636422 – Tax junk food high in sugar and salt, says top doctor 

[2] https://www.bbc.co.uk/news/entertainment-arts-44417509 – Nadiya Hussain on the sugar tax, takeaways and Bake Off adverts

Praising Santa Barbara County’s innovative cannabis regulations

The nascent cannabis sector is alive and well in California.

While many other California counties have shut the door on the legal cannabis market, Santa Barbara County has ensured both consumers and entrepreneurs can profit from cultivation and trade –– and that remains a huge boon to the local economy, taxpayers, and residents.

Out of the 6,481 (temporary) cannabis cultivation licenses in the State of California, 2,075 of them are in Santa Barbara County, accounting for nearly one third (as of February 7, 2019). The potential for job creation and positive economic impact is already being felt.

That’s in large part thanks to Santa Barbara County’s agricultural capabilities and history, its innovative and model rules, and its more flexible approach to welcoming farmers and entrepreneurs who are now entering this legal market. This approach will continue to benefit consumers not just here, but throughout the state. The same applies to the hundreds of local farmers who have already established themselves as competitive players in the state cannabis space.

That’s why we applaud the market-friendly environment so far cultivated in Santa Barbara County, and it should continue to be a model for other jurisdictions currently updating their rules.

The primary goal of cannabis regulations in a state where it is legal, such as California, should be to create smart cannabis policy, defined as a model of regulation that encourages markets, competition, safety, and the eradication of the black market. That’s how consumers and residents will reap the most benefits.

There will bad apples, no doubt. But existing regulations and rules, properly enforced, are the best method for ensuring compliance. That’s especially important when discussing nuisance concerns, laws on odor, size of cannabis farms, and keeping communities safe. Ultimately, consumers and residents alike want rules that help propel a legal and competitive market.

California’s entrepreneurial spirit is alive and well in the Santa Barbara County’s cannabis space, and lawmakers would be wise to harness and ultimately propel this rather than relegating back to the drawing board. The current rules have drawn significant investment to this county, and the benefits will continue to be dispersed.

This is especially true as the Board of Supervisors considers any arbitrary limits on farm size, retail storefronts, and additional nuisance regulations. Let’s continue to offer praise for Santa Barbara’s cannabis regulations that will continue to serve as a model nationwide.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

A ban on local grocery taxes helps Washington consumers

On Election Day in 2018, Washington voters passed an ordinance to curb local governments’ efforts to pass additional taxes on grocery items, including meats, beverages, produce, dairy, grains, and more.

The 55-45 percent vote was no doubt a win for the consumers, but so far reaction to the local tax ban has been negative. Why?

For one, most media coverage focused on the soda industry’s support of the measure, no surprise there. But considering most news media reported this and voters supported it anyway, what does that mean about the initiative itself?

Overall, this was primarily a ballot question on funding and taxation, not on a particular public policy. Voters are usually cautious in supporting new taxes, and are more likely to support proposals that would ban certain taxes.

The disparity that occurs in food prices between city and county jurisdictions are high enough to give plenty of people a headache.

Depending on the county and city you live in, Washingtonians must pay between 7 and 10.4 percent in sales tax, including the state sales tax of 6.5 percent.

According to the Tax Foundation, Washington has the 4th highest combined sales taxes in the country, averaging out at 9.18 percent.

For the average family, that means nearly a tenth of every grocery bill must be paid in taxes. Not to mention property taxes, federal income taxes, fees, and more. The list is endless. If asked whether they should be increased, it’s hardly surprising voters decided against it.

An argument can be made that autonomy to tax is being taken away from local jurisdictions, but a discriminatory tax regime across county or city lines won’t do anything to help consumers.

As we have seen in places such as Philadelphia or Chicago, consumers are more likely to travel across those lines to buy what they want at a bargain. One analysis found that while sales on sugary drinks fells in Philadelphia after the soda tax was passed, sales on those same beverages jumped 38 percent at stores outside jurisdictions.

In the name of pursuing health policy, why should we force residents to travel across city or county boundaries to buy their groceries?

Not everyone agrees with this sentiment, of course.

In neighboring Oregon, former New York City Mayor and billionaire Michael Bloomberg dropped $1.5 million into the campaign to strike down a similar local tax ban. That effort ultimately didn’t pass, meaning cities and counties will be free to pass their own grocery taxes at will.

For Washingtonians on the north bank of the Columbia River, buying groceries in Oregon is almost a sacred ritual, owing to its 0 percent sales tax. Now, emboldened by the ability to pass local taxes and encouraged by health crusaders like Mr. Bloomberg, cities and counties may look to raise additional revenue.

As such, Washington residents should be both proud and relieved. They won’t be seeing their grocery bills climbing any time soon, and that’s because they voted with their wallets on Election Day. They should be praised rather than condemned.

Yaël Ossowski is a journalist, consumer advocate, and deputy director at the Consumer Choice Center

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

U.S. Midterm Primer: What’s at stake for consumer choice?

The Consumer Choice Center doesn’t take positions on any specific political campaigns or elections, but there are at least some interesting state-level ballot proposals happening around the country that could overwhelmingly benefit consumer choice.

In the U.S. federal system, state residents are eligible to vote on certain popular initiatives and state constitutional amendments that will have a major impact on daily life for citizens and consumers.

CANNABIS

Michigan and North Dakota will both vote to legalize cannabis at the state level in separate ballot initiatives. Legalizing cannabis would be a boon to the economy and consumer choice, removing cannabis sales from the black market and allowing governments to both regulate and tax it safely and securely. That’s a huge win for consumers in those states. The same applies to medical cannabis on the ballot in Utah and Missouri. Allowing legitimate medical patients the ability to use cannabis to cure their ailments legally will help potentially thousands of consumers.

GROCERY TAXES

In Washington State and Oregon, there are separate ballot proposals that would prohibit local jurisdictions from imposing additional taxes on grocery items. That would favor all consumers, and help ensure that hard-working American families won’t be forced to pay higher prices for what they already consume, or be forced to shop across city and county lines in order to find the most affordable food. Because they’re regressive, grocery taxes end up hurting lower income houses the most. By capping local jurisdictions’ abilities to raise taxes on groceries across the board, the proposal would ensure Washington and Oregon consumers won’t be subject to discriminatory tax hikes at the local level.

If Seattle is any indication, which passed a city-wide soda tax last year, consumers would be cautious. The soda tax was intended to lower consumption of sugary beverages, but considering the city now estimates it’ll collect $6 million more in taxes than they anticipated, more people are actually buying sodas than before or the numbers are wrong. Data we have from Cook County, Philadelphia, and Mexico consistently shows that higher soda taxes push people to seek alternatives with even more sugar or to shop across state lines to get their sugary drinks. Soda tax measures are well-intentioned, but end up hurting the poor.

ENERGY AND VAPING

Similarly, California’s Prop 6 would require voter approval for all future vehicle tax and fuel fees, as well as cancel the 2017 fuel taxes enacted by the state legislature. Such a proposal ensures consumers have a voice on the fees tacked on for those who drive cars and rely on transportation.

A ballot proposal in Florida seeks to ban both offshore drilling and vaping indoors in the same proposition. The fact that these questions are coupled together is unfair to Florida’s citizens and consumers. Vaping is proven to be less harmful than smoking and shouldn’t be treated the same as tobacco.

NET NEUTRALITY AND INTERNET REGULATIONS

Not up for a vote but still very important issue are a number of states considering their own net neutrality Internat regulations. As we saw in California, state legislatures and executives are considering passing their own rules for Internet regulation. Allowing each and every state to impose their own Internet rules would burden consumers and harm innovation.

More than that, state-level Internet regulations will threaten the vast entrepreneurial and tech space that is growing across the country, and push companies to set up in jurisdictions that promise true Internet freedom rather than state-imposed regulation of content and delivery of Internet services.

FEDERAL ISSUES IN CONGRESSIONAL DISTRICTS

Along with state ballot proposals, the entire U.S. House will be up for election, as well as two-thirds of the U.S. Senate. Important issues on our radar include the future of fees and taxes imposed on the airline passengers, proposals to ban single-use plastics, self-driving car and truck regulations, national cannabis decriminalization, health care freedom, and many more.

Be sure to follow the Consumer Choice Center on social media, subscribe to our newsletter and join CCC as a member, and consider making a donation if you believe our work is important for lifestyle freedom, market access, and consumer choice.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

Monthly update: October 2018

DIGITAL SINGLE MARKET CAMPAIGN

On 10 October, the CCC’s Luca Bertoletti and Bill Wirtz handed the Consumer Choice Center’s Digital Single Market research paper to the European Commission’s Head of E-Commerce.

TESTIMONY ON ONTARIO’S CANNABIS RULES

On 12 October, the CCC’s David Clement testified at the Ontario Standing Committee on Social Policy to provide comments on Bill 36, the province’s cannabis regulations.

CAPITOL HILL BRIEFING ON FDA REFORM

On 18 October, our Jeff Stier participated in a panel discussion dedicated to the FDA’s role in approving new consumer products that will improve countless lives. The event was co-hosted by Taxpayers Protection Alliance, R Street Institute and the Consumer Choice Center.

PUBLIC CANNABIS CONSUMPTION BAN IN ONTARIO WAS REVERSED

On 26 September, Ontario reversed their decision to ban all public consumption for cannabis. Check out how the Consumer Choice Center contributed to the creation of a more equitable, just and consumer-friendly cannabis market in Ontario.

NICOTINE IS NOT YOUR ENEMY SOIRÉE

On 2 October, the CCC hosted the ‘Nicotine is Not Your Enemy Soirée’ in Genève (Switzerland) to celebrate the life-saving advancements in nicotine consumption technology.

BAN AWARD

The Framework Convention on Tobacco Control, a treaty of the World Health Organization (WHO), received the October 2018 BAN Award for preventing tobacco harm reduction and denying the science on life-saving e-cigarette and vaping technology.

EFFECTIVE STAND AGAINST THE FAIR FEES ACT

The FAA reauthorization is off to the White House, after the Senate voted 93-6 to clear the legislation without the FAIR Fees Amendments. Airlines can keep offering modularized services to different passengers with different preferences and price sensitivity. This is a win for consumer choice and competition in the airline industry.Check out how the Consumer Choice Center helped to keep the skies free by effectively opposing the FAIR Fees Act. #FreeSkiesAreFAIR

Brand freedom in the Republic of Georgia

The Issue

In May 2017, policy makers in the Republic of Georgia attempted to push through a branding ban on all tobacco products. Despite the importance of the issue, public opinion was neglected in the debate.

The policy measure was triggered by monetary incentives provided by the UK government to the Georgian budget, through the Framework Convention on Tobacco Control 2030 Project. Consequently, having turned a blind eye on the proper consultation process and scientific evidence of the ineffectiveness of such a policy, Georgian MPs set out to quickly pass a law on banning brands, as well as other significant advertising restrictions..

The CCC’s Response

Within 48 hours, the Consumer Choice Center (CCC) deployed a task force of experts and volunteers to set up pop-up stores at highly frequented locations in Tbilisi seeking to show what a world without brands would look like.

Furthermore, six TV stations interviewed the CCC’s experts and several outlets covered this campaign exposing Georgians to what had been planned by their policy makers behind closed doors. Several print and op-ed articles were also published as part of the same campaign.

The Impact

Brand freedom in the Republic of Georgia was saved for at least another five years, when, on July 26, 2017, the Parliament of Georgia passed an amendment to move the deadline for implementing branding bans from January 1, 2018 to December 31 2022.

During the campaign, the CCC used the examples from Australia and France to show that after implementing similar bans, smoking rates did not decline, but the use of counterfeit cigarettes grew, creating more harm for consumers. Since the introduction of branding bans in 2012, the daily smoker rate in Australia has remained steady at 12%. Added to that, at the same time, the market share of illegal tobacco in Australia has risen 30%, as contraband tobacco has become a lucrative avenue for smugglers. This has resulted in over $1.6 billion AUD in lost tax revenue, according to the Sydney Morning Herald.

What Australia taught us is that banning brands does not reduce smoking. It discourages alternatives, and creates a robust illegal trade in the black market.

In France, when a similar policy was introduced, the government promised manufacturers they would be able to buy the remaining, now illegal, packs. To achieve this, they spent €100 million EUR on cigarettes in order to burn them. Smoking rates did not go down in France after the introduction of branding bans either.

 

Adopting failed policies: Will Singapore jeopardize its leadership in investor confidence?

While Singapore celebrates Intellectual Property Week in September 2018 aiming to become one of the global champions of intellectual property rights and investor confidence the Singaporean Ministry of Health pushes at the same time for a policy that would lead to the opposite and significantly weaken Singapore’s leadership in innovation friendliness and brand freedom in the ASEAN region. The city state could become the first Asian country to introduce plain packaging for cigarettes citing that this will reduce smoking rates and thus positively impact the health of Singapore’s population. And while the reasons for introducing plain packaging are noble and applaudable evidence from countries that have already implemented this policy suggest that it simply doesn’t work.

Australia being the world’s first country banning visible brands on cigarette packs saw a surge in organized crime making a fortune with selling cigarettes on the black market. Officially sold cigarette consumption went down but this decline got compensated by the rise of illegally sold tobacco products bypassing government quality control.

Another piece of evidence on how ill-advised this policy is the fact that French Health Minister Agnes Buzyn publicly admitting that smoking rates in her country were not impacted by plain packaging.

Some other European countries such as the United Kingdom and Ireland followed Australia’s policy on banning brands while ignoring the hard fact that the only ones who really benefit from it are criminals and terrorist groups.

Recently the World Trade Organization (WTO) ruled that Australia did not violate its rules by banning branding for tobacco products and made it look as it was an isolated issue. The latest push by several Australian politicians to introduce plain packaging for financial products such as consumer loans speaks another language. Once the floodgates of branding bans have been opened it is easy to infringe on other products’ brand freedom.

Currently policy makers and public health advocates around the world are discussing plain packaging for breakfast cereals and Chile has even introduced this bizarre-sounding policy claiming that it protects children. The Mayor of London has announced advertising bans for fast food in public transport and Thailand banned food ads targeted to young adults in 2017.

Singapore currently ranks 5th in the UN’s Global Innovation Index and first in the ASEAN region. The introduction of stricter rules on how infant formula milk can be advertised and marketed in late 2017 were an unusual and counter-intuitive step away from Singapore’s regional leadership in brand freedom. It seems that plain packaging for tobacco products is next in Singapore’s pipeline towards brand infringement. A slippery slope towards more regulation and less brand freedom could include many additional policy measures and result in a massive loss of investor and consumer confidence in Singapore.

Policies that boost black markets in and around Singapore, do not cause the desired effect, and weaken its role as a regional and global champion of markets and investments should be opposed. If it wants to maintain its very strong global and regional position in brand freedom and innovation Singapore should focus on evidence-based policies and embrace brand freedom instead on infringing on commercial speech and freedom of expression.

 

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About Fred Roeder

Fred Roder has been working in the field of grassroots activism for over eight years. He is a Health Economist from Germany and has worked in healthcare reform and market access in North America, Europe, and several former Soviet Republics. One of his passions is to analyze how disruptive industries and technologies allow consumers more choice at a lower cost.

Fred is very interested in consumer choice and regulatory trends in the following industries: FMCG, Sharing Economy, Airlines.

In 2014 he organized a protest in Berlin advocating for competition in the Taxi market.

Fred has traveled to 100 countries and is looking forward to visiting the other half of the world’s countries.

Among many op-eds and media appearances, he has been published in the Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Die Welt, the BBC, SunTV, ABC Portland News, Montreal Gazette, Handelsblatt, Huffington Post Germany, CityAM. L’Agefi, and The Guardian.

Since 2012 he serves as an Associated Researcher at the Montreal Economic Institute.

CCC Submission to the FDA: Flavor Bans on Less Harmful Products

To:       Food and Drug Administration:

Agency/Docket Number: Docket No. FDA-2017-N-6565

RIN: 0910-AH60

From:  Jeff Stier, Senior Fellow

Consumer Choice Center

Date:   July 17, 2018

This document is in response to the FDA’s request for comments, data, research results, or other information about, among other things, how flavors attract youth to initiate tobacco product use and about whether and how certain flavors may help adult cigarette smokers reduce cigarette use and switch to potentially less harmful products.

The FDA should be applauded for seeking more information about flavors in combustible tobacco products and e-cigarettes as it considers how to protect public health under the Tobacco Control Act.

Flavor Bans on Less Harmful Products:

The FDA might be seeking to use this vaguely-worded ANPR to begin the process of either directly banning certain flavors in e-cigarettes, or to deny premarket tobacco applications (PMTA) for products containing certain flavors. Doing so without conclusive and comprehensive data to prove that the benefits of such bans outweigh their costs. No such evaluation could possibly take place at this time, for the reasons described below.

The city of San Francisco has already banned the sale of all flavors in e-cigarettes, even to adults. This local ban, and others that could follow, are already undermining the FDA’s comprehensive regulatory plan to fight smoking, given the critical role flavors play in helping adult smokers both reduce their cigarette use and to quit smoking completely through the use of less harmful alternatives. As Director Zeller has stated, products that are potentially less harmful than cigarettes must also appeal to adult smokers in order for them to switch. I am aware of no evidence that if certain flavors were removed from the marketplace, adult smokers would continue to use e-cigarettes instead of tobacco cigarettes.

As other submissions to this docket illustrate, there are a wide variety of preferences among adult e-cigarette users (almost entirely former smokers, or those who have significantly reduced use, many of whom are on a path to quitting), and some cite their ability to use a variety of certain flavors to keep their interest; “anything not to go back to cigarettes,” is a common refrain.

No adult smokers should be restricted from having access to lower-risk products that can help them reduce harm from smoking.

We’ve seen cigarette use decline among adults as e-cigarettes have taken market-share from cigarettes.

But a significant number of adults still smoke, even as they say they’d like to quit.

Many of these smokers have tried NRT together with counseling, and have still been unable to quit completely and permanently. For the most inveterate smokers, e-cigarettes with a wide range of flavor choices have been their only savior.  Any intervention that makes it harder for adults to quit the use of combustible tobacco is not acceptable, even if the trends of overall smoking rates is moving in a more positive direction.

We cannot be complacent with currently available NRTs, nor can we count on NRTs developed in the future, nor should we believe that currently available e-cigarettes are enough to help every smoker.  A ban on certain flavors would harm an unknown number of adult smokers, by blocking what may be their own best cessation option.

Back to Basics: Smoking Prevention and Cessation

Preventing youth initiation of cigarette smoking — as well as helping adult smokers who want to quit smoking  — should be paramount.

Far too many kids today initiate smoking combustible cigarettes and far too many adults who want to quit have not been successful.

Youth Vaping Versus Adult Cessation, a False Dichotomy:

FDA need not try to engage in the impossible task of accurately guessing whether the benefit of preventing some youth from initiating e-cigarette use by banning certain flavors outweighs the cost of preventing adults from quitting smoking by banning certain flavors.

The FDA was correct to ban the sale of all e-cigarettes to minors. The agency should use the enforcement power granted to it by Congress to prevent all e-cigarette sales to minors. The agency should also incorporate youth prevention messages with a long overdue tobacco harm reduction educational campaign, which would inform all citizens, regardless of their age, about the unique dangers posed by cigarette smoking.

The Not Yet Knowable Promise of Harm Reduction:

Given widespread misconceptions about nicotine, no current or past analysis of the efficacy of e-cigarettes to help adult smokers quit should be considered a representation of the full potential of the public health benefits of non-combustible tobacco products. These products can only reach their potential after a number of conditions are met;

  • All smokers, including vulnerable populations, are able to differentiate between the dangers of nicotine use, including from the use of non-combustible recreational products, and the dangers of smoking.
  • The market is fully mature and able to quickly adjust to always-evolving consumer preferences and new technologies.
  • Lower-risk products are given an opportunity to compete in the marketplace with already commoditized cigarettes, where the costs of innovation, regulatory compliance, and marketing are low compared to new products

Further, because PMTA guidelines need to be more transparent and because product innovation is frozen as a result of the deeming regulation, the market for e-cigarettes and other non-combustible products is not anywhere near fully developed. Look only to the FDA’s continued failure to grant modified risk tobacco product claims on snus and heated tobacco.

Therefore, because it is impossible to fully ascertain how many smokers could quit smoking through the use of certain e-cigarette flavors, it is impossible at this time to consider the public health costs of banning the sale of certain flavors to adults, even if those flavors contribute to the appeal of e-cigarettes among youth, especially given the fact that sales of e-cigarettes are already forbidden to minors.

It is not acceptable for youth to use e-cigarettes. Period.

But this does not mean that banning certain flavors because they may appeal to youth is justified, regardless of the fact that doing so would undermine cessation either now, or when conditions for harm reduction to achieve its potential are met.

Less Intrusive and More Effective Interventions to Prevent Youth Vaping:

The FDA must also recognize the role of parents, families, school, and communities to prevent youth e-cigarette use, or far worse, youth smoking.

Product bans are the most blunt tool available to regulators. And they come with a potentially very high cost to those truly in need of better choices: adult smokers, a segment of the population that has been shunned, heavily taxed and literally forced out into the cold, but not helped by regulators.

A ban on certain flavors will prevent a currently unknowable number of adult smokers from quitting, while illicit youth vaping will continue. Harming adult smokers by preventing them from legally purchasing appealing lower-risk alternatives in the name of potentially protecting some youth is not an acceptable trade, especially when a more narrowly-tailored regulatory option is already in place, even though enforcement efforts have been insufficient to prevent all illicit sales to minors.

Marketing Restrictions, Not Flavor Bans:

This does not mean that, short of more effective enforcement and educational efforts, there are no other appropriate regulatory tools available to prevent youth use of e-cigarettes.  The agency should distinguish between regulating certain flavors and regulating the marketing of e-cigarettes to reduce the appeal to youth. For instance, even though many adults enjoy the taste of gummy bears, the FDA could consider regulating products marketed as “gummy bear” e-cigarettes, without banning the actual flavor used in those products, which appeal to adult smokers.  This is not to say that e-cigarette companies shouldn’t be allowed to market their products with fun and imaginative names to attract adult smokers. In fact. marketing is essential to appeal to smokers— and e-cigarette advertising effectively and narrowly targeting adult smokers amounts to private-sector funded smoking cessation campaigns that achieve more than scolding and fear-inducing ads ever could. However, if the FDA finds it necessary to take additional regulatory action to prevent youth e-cigarette use, it could do so in a way that advances this worthy objective in a way that limits the harm caused to adult smokers.

Menthol:

The FDA is also considering whether to regulate menthol in combustible cigarettes.

The Tobacco Products Scientific Advisory Committee report on menthol steered clear of making a policy recommendation to the FDA. The report addressed a number of unintended consequences on a ban on menthol, but the FDA has not yet produced sufficient evidence to address these concerns to consider a rule on menthol.

The FDA also issued a report, “PRELIMINARY SCIENTIFIC EVALUATION OF THE POSSIBLE PUBLIC HEALTH EFFECTS OF MENTHOL VERSUS NONMENTHOL CIGARETTES: but the report stated that it did not “constitute a decision about what regulatory action, if any, FDA might take with respect to menthol in cigarettes.” This is appropriate, since the question of menthol versus nonmenthol cigarettes is very different than the question of what impacts, including unintended ones, a ban of the sale of menthol cigarettes would have on the population.

Adding to the evidence against a ban on menthol cigarettes, in 2015, the National Academy of Sciences published a report, “UNDERSTANDING THE U.S. ILLICIT TOBACCO MARKET Characteristics, Policy Context, and Lessons from International Experiences,” which reported that:

On the question of reducing menthol in cigarettes, the research has been limited to consumer surveys and short-term laboratory studies of U.S. smokers using nonmentholated products. That research suggests most smokers would consider legal alternatives, including switching to a nonmentholated cigarette or quitting. Some may choose some kind of self-mentholation technology if the option is available. This research also indicates that highly addicted smokers and daily users would be more likely than other smokers to seek mentholated cigarettes through the illicit market. 

To date, the FDA has not addressed the points made in the NAS report with regard to the efficacy of any proposed menthol ban, or such a ban’s effect on the illicit market. Currently, the literature suggests that while a ban might curb some smoking among less addicted menthol smokers, it would also increase the size of the illicit market and come with the wide range of costs associated with that, which include an increased rate of youth initiation of cigarette smoking.

Incorporation of Earlier Comments:

The FDA received 174,466 in response to the now closed 2013 docket on menthol in cigarettes, Docket ID: FDA-2013-N-0521. Because the current docket addresses many topics, including menthol in cigarettes, the FDA should incorporate all comments from Docket ID: FDA-2013-N-0521 into the current docket in order to fully understand the issues as it considers this ANPR. Little has changed in terms of policy considerations or the science of menthol in cigarettes since the earlier docket, and those who commented at the time may no longer be available to comment in the current docket, or they may have a reasonable expectation that the prior comments are taken into to account in the current ANPR, since the same issue is under consideration. Further, since there have been personnel changes at both the FDA, and at OMB, which must evaluate the rule, it is important that those comments be incorporated into the current docket.

Jeff Stier

Senior Fellow

Consumer Choice Center

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

When environmentalists oppose science

In the era of self-driving cars, big data and increasingly sophisticated bio-medical advances, the age-old question of how regulation can keep up with technology is more relevant than ever.

Scientific advances touch every aspect of our lives, often in ways we rarely think about. Today, we live longer, healthier, more productive and more enjoyable lives because of our access to products that were unimaginable for most of human history. So it’s important to get the right balance when regulating our modern world, to both keep us and our planet safe, while fostering innovation that benefits society.

The debate over regulation often devolves into a debate about “too little” versus “too much” regulation, split along the ideological divide. Too little regulation, goes the argument, and we are exposed to too much risk. Too much, and we don’t advance.

This binary approach, however, represents the dark-ages of regulatory policy. It was more frequently relevant when our tools to measure risk were primitive, but today’s technology allows much more precise ways to evaluate real-world risks. With less uncertainty, there’s less of a need to cast a broad regulatory net.

Regulation not warranted by countervailing risk just doesn’t make sense. That’s why a pseudoscientific approach, dubbed the “precautionary principle,” behind much of today’s regulation is so pernicious. This dogma dictates that it’s always better to be safe than to ever be sorry. The approach is politically effective not only because it’s something your mother says, but because it’s easier to envision potential dangers, remote as they may be, than potential benefits. Uncertainty, it turns out, is a powerful tool for those who seek to live in a world without risk.

But what happens when regulators can get a reasonably good handle on benefits and risks? Some potential risks have been eliminated simply because the basis for the concern has proven to be unwarranted. For more than two decades, the artificial sweetener, saccharin, came with a cancer warning label in the U.S.But it turned out that the animal experiment which led to the warning was later found to be irrelevant to humans, and the warning was eventually removed.

Warning about a product when risks are not well-understood is prudent. But it would be absurd to continue to warn after the science tells us there’s nothing to worry about.

Today, an analogous situation is playing out in the EU, where activists are using outmoded tests not just to place warning labels on silicones, a building block of our technological world, but to ban them outright.

The playbook is predictable: as the scientific basis for a product’s safety grows, opponents go to increasingly great lengths to manufacture uncertainty, move the goalposts and capitalize on scientific illiteracy to gain the political upper-hand.

We’ve seen these tactics employed in opposition to everything from growing human tissue in a lab, to harm-reducing alternatives to smoking, such as e-cigarettes. Now, the effort to manufacture uncertainty is playing out in the debate over the environmental impact of silicones, which are used to in a wide range of consumer, medical, and industrial products.

Fortunately, in the case of silicones, regulators in a number of countries, including Australia, have put politics aside and adhere to appropriate scientific methods to inform their decision-making.

The Health Department’s National Industrial Chemicals Notification and Assessment Scheme published an environmental assessment for certain chemicals used to make silicones, in particular, a class of chemicals called siloxanes. Silicones have unique properties which make them useful in a wide range of applications, including aviation, energy-efficient LED lighting, medical products, and personal care products. But their widespread use and unique properties have raised questions about their effect on the environment, such as whether they bioaccumulate and pose a risk to aquatic life. The report employs a risk-based approach, the very type that European-based precautionary principle advocates oppose.

Here’s where we get back the issue of uncertainty. Advocates for restricting the use of certain siloxanes rely primarily on studies done in laboratories, which don’t replicate how the chemicals respond to real-world conditions, where for instance, they quickly evaporate. (This property is what makes them particularly useful in sunscreens which spread easily and evaporate quickly.)

Laboratory studies are a valuable part of evaluating chemicals because they can identify the potential that a particular substance poses a hazard. But hazard assessments are of limited value without considering real-world circumstances. To do that, scientists do risk assessments, which takes into account factors such as the level of exposure to the hazard in conditions being evaluated.

We like to look at it this way: falling out of a boat and drowning to death is a hazard. However, the risk of drowning in a desert is so low because there’s no exposure, that it a risk not worthy of concern.

This rational approach to hazard and risk was successfully adopted in Canada. Environment and Climate Change Canada (ECCC), using real-world exposure information, decided to minimize exposure to a level that didn’t degrade the environment, requiring monitoring from certain industrial sources. In other words, the ECCC didn’t just consider the hazard, they also considered the risk. As a result, Canada did not ban consumer use, but, instead, took steps to reduce environmental exposure from only a narrow group of industrial sources that were potential problems.

With regard to one siloxane, D4, ECCC regulators found that the chemical “is entering or may be entering the environment in a quantity or concentration or under conditions that have or may have an immediate or long-term harmful effect on the environment or its biological diversity.” But instead of banning its use, consistent with their risk management approach, they required a significant reduction of “D4 releases to the aquatic environment” and encouraged the use of alternatives to reduce or minimize risks.

On D5, Canada’s regulators did something even more practical. Recognizing industry objections to the E.U.-style modeling approach, which ECCC initially used for D5, the Board of Review took real-world exposures of D5 into account. Then they did what all good scientists should be prepared to do: they reversed course after finding that new, more accurate data conflicted with their initial findings. In light of the improved information, the ECCC regulators wrote that “it is virtually impossible for Siloxane D5 to occur in any environmental matrix at concentrations sufficient to produce harm to the environment.”

Similarly, the U.S. Environmental Protection has been working in concert with manufacturers to measure the degree to which key chemicals used in the manufacture of silicones are released into the environment, as well as what happens to the chemicals in real-world circumstances, rather than through modeling or laboratory studies which don’t necessarily reflect what happens in nature.

Australia’s report is consistent with these approaches, noting that “[t]he direct risks to aquatic life from exposure to these chemicals at expected surface water concentrations are not likely to be significant.”

This is the very type of scientific analysis that European activists disdain. Because for them, environmental protection is not measured by outcomes, but by the severity of restrictions, regardless of the quality of science used to justify them.

We support tough environmental regulation when the best science supports it. But sadly, many of today’s environmentalists see science only as a tool to advance an anti-progress political agenda. When the science contradicts the agenda, the science is the first to fall by the wayside.

In legal circles, they say “If you have the facts on your side, pound the facts. If you have the law on your side, pound the law. If you have neither on your side, pound the table.” The opposition to risk-assessments is the scientific equivalent to pounding the table.

The value of the Canadian and Australian approach is that consumers will continue to benefit from improved product performance provided by silicones. The environment will benefit as well, given silicones widespread use in green energy products, from solar panels to wind turbines and even in energy efficient lighting.

Australia’s risk-based approach should be a model for other governments assessing not only silicones, but all innovative products because it ensures the protection of the environment, while at the same time, when the science justifies it, also protecting consumers’ access to incredibly useful products.

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Originally posted on Catallaxy Files.

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About Jeff Stier

Jeff Stier is a Senior Fellow at the Consumer Choice Center.

Mr. Stier has been a frequent guest on CNBC, and has addressed health policy on CNN, Fox News Channel, MSNBC, as well as network newscasts. He is a guest on over 100 radio shows a year, including on NPR and top-rated major market shows in cities including Boston, Philadelphia, and Sacramento, plus syndicated regional broadcasts.

Jeff’s op-eds have been published in top outlets including The Wall Street Journal, The Los Angeles Times, The New York Post, Forbes, The Washington Examiner, and National Review Online.

Ending sugar protectionism will help boost small business and benefit consumers

This week in the nation’s capital, the House Agriculture Committee will decide the fate of various agricultural subsidies and food benefits for millions of Americans.

The bill, H.R. 2, known as the Farm Bill, includes provisions on crop insurance, dairy prices, wetland conservation, Supplemental Nutrition Assistance Program (SNAP) adjustments, and dozens of other rules and regulations on commodities.

Tucked within this massive bill is a continuation of the U.S. Sugar Program, a decades-old government program that effectively sets prices for sugar, guarantees cheap loans for domestic sugar producers, and keeps out foreign competitors. It’s sugar protectionism, through and through.

As I mentioned in the Washington Examiner some months ago, this program has the unintended consequence of raising the costs of sugar for various small businesses, and passing those costs on to consumers.

The consequence of that multi-decade arrangement, however, has been higher costs for consumers and domestic businesses that rely on sugar as a base ingredient for their products.

According to the American Enterprise Institute, users and consumers of sugar lose out to the tune of $2.4 billion-$4 billion a year. That directly hurts the thousands of small businesses that rely on sugar’s low prices.

Now that the Farm Bill is set to be voted on in the committee, legislators have a chance to alter this program that has proven to be a huge burden to small businesses and consumers.

Key to this will be the Foxx Amendment, proposed by U.S. Rep. Virginia Foxx from North Carolina. This amendment would shrink the U.S. Sugar Program from its current size to a more moderate version. It wouldn’t go so far as scrapping the program, but it would make necessary changes that would better benefit consumers and American businesses that rely on affordable sugar.

In an op-ed with Americans For Tax Reform President Grover Norquist, Foxx makes the case for reforming the U.S. Sugar Program and slimming down sugar protectionism once and for all.

But the sugar program costs some Americans more than higher grocery prices: it costs them their job. As the U.S. International Trade Administration found, the program kills three manufacturing jobs for every sugar-producing job that it protects.

Let’s look at a few painful examples. The Spangler Candy Company reports, “Today, we have about 150 people making candy for us in Mexico. In 2017, Spangler had 900 people apply for jobs at our Ohio factory. I would love to offer 250 of them a job as a candy cane maker, but our government insists that sugar processing jobs are more important than manufacturing jobs. They are picking winners and losers and our town has been the loser for many years now.”

The Atkinson Candy Company moved 80 percent of its peppermint-candy production to a factory in Guatemala that opened in 2010.

And the makers of President Reagan’s favorite candy, Jelly Belly, had to build its new 50,000-square-foot plant in Thailand thanks to the high sugar price driven by U.S. policy.

The evidence is overwhelming — this is an expensive and damaging special-interest giveaway and it must be stopped.

As Foxx and Norquist demonstrate, the current sugar program forces small, family-owned food companies to pay twice as much for sugar as the rest of the world. It restricts how much domestic sugar can be sold, and how much sugar can be imported from other countries.

That’s a huge blow to consumer choice, not to mention an indirect tax to small businesses that rely on sugar for their products.

According to the U.S. Census Bureau, the sugar program killed 123,000 jobs between 1997 and 2015. The U.S. Department of Commerce reports that for every sugar-processing job subsidized through artificially high U.S. sugar prices, three American manufacturing jobs are lost.

In response, Foxx introduced her own bill to tackle the program and modernize it. The Sugar Policy Modernization Act of 2017, introduced back in November, currently has 80 co-sponsors but remains stuck in the House Agriculture and Ways and Means Committees.

The Farm Bill will take precedence, and thus focus will now be on the Foxx Amendment to make the needed changes for America’s domestic sugar policy. If legislators want to help prop up American consumers and small businesses rather than Big Sugar, they would vote to reign in the sugar protectionism in the Sugar Program.

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About Yaël Ossowski

Yaël Ossowski is a journalist, activist, and writer. He's currently deputy director at the Consumer Choice Center, and senior development officer for Students For Liberty. He was previously a national investigative reporter and chief Spanish translator at Watchdog.org, and worked at newspapers and television stations across the country. He received a Master’s Degree in Philosophy, Politics, Economics (PPE) at the CEVRO Institute in Prague. Born in Québec and raised in the southern United States, he currently lives in Vienna, Austria.

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