Authored by James Hickman via SchiffSovereign.com,
PepsiCo spent $2.8 million last year lobbying to keep junk food eligible for food stamps.
But last week - after Health and Human Services Secretary Robert F. Kennedy Jr. got 18 states to ban SNAP purchases of products like soda, candy, and processed snacks - PepsiCo announced price cuts of up to 15% on Doritos, Lay’s, Tostitos, and other Frito-Lay products.
The company’s official explanation was “affordability.” CEO Ramon Laguarta cited low-income consumers are switching to store brands.
But the timing tells the real story.
The Supplemental Nutrition Assistance Program— food stamps— is a $100 billion per year program serving roughly 42 million Americans. And according to the USDA’s own data, about 20 cents of every SNAP dollar goes to sweetened beverages, candy, salty snacks, and sugar.
In fact soft drinks alone are the single largest category of SNAP purchases.
And, until last week, products from Pepsi’s Frito-Lay division were in 7.2% of all shopping trips paid for with SNAP (i.e. taxpayer-funded) benefits.
So when the government stopped subsidizing demand for their products, PepsiCo had to do something they hadn’t needed to do in years: compete.
This is what the free market does— it forces companies to be more efficient, cut prices, and pass savings on to their customers.
Source: ZeroHedge News
