The Coca-Cola Company (KO), PepsiCo, Inc. (PEP), And A Taxing Decision for Soda Makers

In fact, cola consumption is on the decline in the U.S., with water surpassing soda as the preferred drink of choice. The market researchers at Mintel note that sales of beverages declined almost 2% between 2009 and 2011, while the Beverage Information Group says that over the decade between 2001 and 2011, annual soda consumption fell 15%. No doubt that explains why Coke and PepsiCo, Inc. (NYSE:PEP) own major water bottlers today.

Coke reported a 1% decline in North American soda sales last year, and Pepsi saw carbonated soft drinks suffer a 4% drop . But with states such as California and Vermont continuing to push for new soda taxes, the threat hasn’t ended.

California wants to add a penny-per-ounce tax that would increase the cost of a can of soda by $0.12, while Vermont once again considered — and killed — a hefty $1.28-per-gallon soda tax.

While there are many times government policy can mold individual action, Denmark at least has realized that taxing soda has largely been a failure. It’s regressive in nature, falling most heavily on the poor, and considering the sedentary, inactive lifestyles most Americans lead, singling out any particular beverage or food for retribution hardly makes the proposed solution easy to swallow.

The article A Taxing Decision for Soda Makers originally appeared on Fool.com.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Coca-Cola and PepsiCo and owns shares of PepsiCo.

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