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How Big Business Really Works

October 18, 2016
Plain English Version

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Soda companies spend millions on research. They give the money for health studies. The research shows how harmful sugar is in the diet. Why would the soda companies do that?

The answer says a lot about big business. First, big business must not deny there is a problem if there is one. Studies do link sugar consumption to obesity and diabetes. Years ago, tobacco companies said smoking was not a cause of cancer. This denial cost the companies billions of dollars in lawsuits. It also caused bans on smoking.

Coca-Cola and Pepsi are two of the biggest soda companies. They gave millions of dollars to academic and medical groups. The reason was to study the link between sugar and health. In general, the research showed that too much sugar had a negative impact on health.

The findings led to efforts by governments to reduce the consumption of sugar. The most popular idea was to place a tax on soda. Businesses hate taxes on their products. It often results in lower sales. This created a paradox. Soda companies were spending millions on research that damaged their product’s appeal. Then they spent million to lobbying against taxing soda.

One study looked at the groups that got the money for research. It said some did not support the government’s attempts to tax soda. The reason some said, was that they had other priorities to attend to. All denied the money influenced the research.

The segments of the population that suffer from obesity and diabetes are black and Hispanic people. Soda companies gave millions to minority advocacy groups. They went on to oppose taxes on sugary drinks. They said people would drink them anyway. It would just cost them more to do so.

This is what the soda companies learned from the tobacco scandal. Support legitimate efforts to warn people of the dangers posed by your product. Then call for moderation and education to reduce consumption. Educate youngsters about pluses and minuses of the products.

Companies think they can deal with public health programs. But they do not want taxes imposed on the product. That hurts their bottom line. And that discourages investors.

It may be helpful to know the rules of the game.

Source: The New York Times October 10, 2016

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