01 May 2013 Pepsi CEO Responds to Questions About Company’s Food Stamp Lobbying

Free-Market Group Asks Pepsi to Explain Why Taxpayers Should be Forced to Subsidize Soda Purchases

Pepsi CEO Thanks National Center for Working on the “Right Issue,” But Says PepsiCo Just Differs in Approach and Solution

New Bern, NC / Washington, D.C. – At today’s annual meeting of Pepsi shareholders in New Bern, North Carolina, the birthplace of Pepsi, Justin Danhof, Esq., director of the National Center for Public Policy Research’s Free Enterprise Project, asked Pepsi CEO Indra K. Nooyi about Pepsi’s efforts to keep soda beverages eligible for the government’s SNAP program, often referred to as “food stamps.”

Danhof spoke with Ms. Nooyi at a private meeting before the shareholder meeting and again during the shareholder meeting’s Q&A session.

“In response, Ms. Nooyi said the National Center was working on the ‘right issue’ and definitely understands our concerns about taxpayers subsidizing unhealthy lifestyles – she just prefers a different approach to curbing the problem,” said Danhof. “Ms. Nooyi thinks that the U.S. Department of Agriculture – which monitors the Supplemental Nutritional Assistance Program (SNAP) – should incentivize healthy purchases. While this is an interesting idea, it dodges Pepsi’s role in food stamp lobbying, and there is no reason that the USDA and state governments can’t incentivize healthy lifestyles and restrict soda purchases at the same time.”

Ms. Nooyi told Danhof that she had recently returned from Washington D.C., where she met with the Department of Agriculture on ways to work together to promote healthy food choices. She also told him that PepsiCo has increased the percentage of its marketing dedicated to the company’s more healthy foods and beverages, which includes, among other products, about two-dozen items in the Quaker Oats line, the Tropicana brand of fruit juices, Naked Juices and Muller Quaker dairy yogurts.

Nearly 47.7 million Americans currently receive some form of “food stamp” welfare through SNAP – a near record setting number. Pepsi and other makers of soda beverages are receiving a reported total of $4 billion in soda sales through SNAP annually. Pepsi has consistently lobbied against attempts to restrict the use of SNAP benefits.

“During President Barack Obama’s White House tenure, SNAP enrollment has boomed, consistently setting new records for the number of these welfare recipients. Most people consider this a national tragedy, but for some manufacturers, it can be a business opportunity,” said Danhof.

“Ms. Nooyi said she was concerned about the slippery slope in restricting SNAP funds – that the USDA might limit access to other food and drink options if it restricts sodas. The slippery slope is one of the weakest arguments in law and rhetoric,” said Danhof. “In any case, the government already prohibits the purchase of tobacco and alcohol with SNAP funds. How hard could it be to add carbonated soda as a category? I understand the company’s point, but I simply disagree.”

Danhof adds, “Our belief is that it is not okay for the government to force some Americans – the taxpayers – to subsidize non-nutritious treats for other Americans. If the purpose of the SNAP program is to be certain poor people can afford a sufficient amount of nutritious foods and beverages, doesn’t funding non-nutritious soda undermine the purpose of the program? And if Americans want to buy treats for other Americans, they can make voluntary donations to do so.”

“Individual Americans should be able to purchase as much soda as they desire and can afford,” said Danhof. “In a free marketplace, people should be able to purchase what they want. That is why Pepsi was right to fight New York Mayor Michael Bloomberg’s efforts to ban large beverages, but wrong when it fought his efforts to limit SNAP funds to healthier items,” said Danhof. “SNAP money does not operate in a free market. It is taken from people’s paychecks. It is reasonable to limit how those benefits are administered and for what items these benefits can be used.”

Last Wednesday, the National Center delivered the same message to Coca-Cola executives, who replied, stating: “Regarding your question on the Company’s position on Supplemental Nutrition Assistance Program (SNAP) participant purchases, we join with others in the non-alcoholic beverage industry and the broader food products industry concerned about any static policy, including SNAP benefits, that would look across 300,000+ items in a grocery store and arbitrarily restrict the sale of some of our products based on calorie content.”

“We agree with the beverage industry far more than we disagree,” said Amy Ridenour, chairman of the National Center for Public Policy Research. “We completely agree that the government should not arbitrarily restrict the sale of any products based on their calorie content. That’s not only anti-freedom, but also ridiculous, as a healthy balanced diet can include a number of high-calorie items and even include a reasonable amount of sugary soda. We will never join the food police. We’re just sticking up for the taxpayers, who prefer subsidizing orange juice to soda.”

The National Center’s activism at the Coca-Cola meeting was reported in dozens of local and national media outlets including the Washington Examiner, the Atlanta Business Chronicle, the Boston Globe, the Denver Post, the Houston Chronicle, the Milwaukee Journal Sentinel and many others.

The National Center raised a similar issue at the 2012 shareholder meeting of Yum! Brands, the parent company of Kentucky Fried Chicken, Taco Bell, Pizza Hut and Wingstreet.

The National Center has been an active and frequent defender of the right of Americans to make their own food choices against the so-called “food police,” such as New York Mayor Michael Bloomberg, and defended Pepsi against a silly charge on the floor of the U.S. House of Representatives by Congresswoman Shelia Jackson Lee (D-TX) that Pepsi’s 2011 Super Bowl commercial was “demeaning” to African-Americans.

A copy of Danhof’s question at today’s shareholder meeting, as prepared for delivery, can be found here.

The National Center for Public Policy Research is a Pepsi shareholder.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from individuals, less than 4 percent from foundations, and less than 2 percent from corporations. It receives over 350,000 individual contributions a year from over 96,000 active recent contributors. In 2012, zero percent of its contributions came from the fossil fuel industry or related foundations.

Contributions to The National Center are tax-deductible and greatly appreciated.

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