Summary: BMI and Healthcare Cost Impact of Eliminating Tax Subsidy for Advertising Unhealthy Food to Youth

CHOICES research found that eliminating the tax subsidy of TV advertising costs for unhealthy food and beverages advertised to children and adolescents could be a cost-saving strategy to reduce childhood obesity and related healthcare expenditures.

BMI and Healthcare Cost Impact of Eliminating Tax Subsidy for Advertising Unhealthy Food to Youth.
Sonneville KR, Long MW, Ward ZJ, Resch SC, Wang YC, Pomeranz JL, Moodie ML, Carter R, Sacks G, Swinburn BA, Gortmaker SL.
Am J Prev Med. 2015 Jul;49(1):124-34. doi: 10.1016/j.amepre.2015.02.026.
Abstract | Full text

Every year, children in the US are exposed to thousands of food-related TV advertisements, most of which promote nutritionally poor foods and drinks. Despite changes in media consumption, TV remains the predominant platform to reach youth, and the advertising industry knows it. Food marketers spend millions of dollars on youth-directed television each year, and these advertising expenditures are currently treated by the US government as an ordinary business expense. In 2009, for example, the food and beverage industry received a tax subsidy of nearly $80 million for the $633 million spent on TV advertising to children.

With factors such as the US Constitution’s protection of marketing as commercial speech and the government’s reluctance to regulate even minimal restrictions on advertising, eliminating or amending the tax deduction available to food companies for the costs of advertising to children has been proposed.

“By changing the tax treatment of advertising expenses, the food industry will have less incentive to advertise unhealthy foods and drinks to kids,” says lead author Kendrin Sonneville, ScD, RD, Director of Nutrition Training in the Division of Adolescent Medicine at Boston Children’s Hospital.

The study intervention involved the elimination of this tax subsidy, applying to television programming watched on traditional TV and to television advertising aired during children’s programming, reaching nearly 74 million youth between the ages of two to 19. By using a simulation model, the researchers estimated that the intervention would reduce an aggregate 2.13 million BMI units in the population, costing $1.16 per BMI unit reduced. Over a 10-year period, the intervention would result in $352 million in healthcare cost savings and gain 4,538 quality-adjusted life years (QALYs).

While the effects of the intervention may be small at the individual level, such a policy could have substantial impact on healthcare expenditure at the population level. Although the policy would likely be met with opposition from the food industry, eliminating the tax subsidy of advertising expenses would also generate tax revenue and is likely to receive strong public support. The study provides important information for a feasible approach to reducing children’s advertising exposure.