Banning Large Sodas: Who Loses, Who Wins
by Kathryn Tuggle
Published June 01, 2012
FOXBusiness
He’s banned smoking in bars, restaurants and city parks, and now New York City Mayor Michael Bloomberg is taking aim at large fountain drinks.
The mayor, currently in his third term, is proposing eliminating soft drinks larger than 16 ounces in restaurants, stadiums and movie theatres citywide as well as at mobile food carts and delis. While the proposal won’t be submitted to the Board of Health until June 12, if passed into law, businesses would be forced to comply as early as June 2013. According to the mayor’s office, any violations will cost $200 per offense, and many businesses are up in arms over the extreme measures.
“There are reports that say too many sugary beverages cause obesity, but the one thing that a lot of these reports leave out is ice,” says Jeff Lenard, vice president of communications for NACS, The Association for Convenience & Fuel Retailing. “As fountain drink portions get larger, so does the amount of ice. To presume there is 32 ounces of beverage in a 32-ounce cup is oversimplifying things.”
Although Bloomberg’s proposed ban will not apply to convenience stores, grocery stores or drug stores at this time, Lenard says that any business forced to implement changes will incur additional expenses, and those expenses will most certainly be passed onto consumers.
“If you spend money to change your business, you’re going to have to pass those costs onto the consumer. Some businesses will have to spend tens of thousands of dollars to redo counter space or purchase new cups and lids. I would hope that any new law takes into consideration that companies will have to make capital expenditures to comply,” says Lenard.
Although Lenard says the proposed law would mean a “big shift” in how some food and beverage retailers go to market, at the end of the day, the smaller the beverage served, the better the profit margins for companies. On average, NACS reports that cups used at fountain drink machines cost 6 cents no matter the size, lids cost 4 cents, and straws cost 2 cents.
“The cost of the cup doesn’t change whether you’re selling a 64 ounce or a 12 ounce. The only thing that changes is how much liquid you can put in the cup, so there are actually better margins the smaller the beverage.”
But even if retailers stand to make more money on smaller drinks, consumers may only reap more hassle. “Take construction workers for example,” Lenard says. “It’s not convenient for them to make a couple of trips buying multiple beverages. When they come into a store, they are going to get everything they need for breakfast and lunch, and they’re going to want to get those larger-sized drinks. Once the weather heats up, you’re going to be seeing an even higher ratio of ice to liquid anyway.”
Another group of workers negatively impacted by the proposed restriction could be truckers, who aren’t always able to pull over and find a parking spot to buy drinks several times during their daily shift.
“There are all kinds of uncertainties around the proposal,’ says Lenard. “Obesity is an equation: you have you have more calories in than you have calories out, and passing a law restricting the sale of certain beverages is not necessarily solving the problem.”
But Bloomberg says the ban would be a step in the right direction to reduce expanding waistlines.
“This is something we think we have the legal authority to do. We’re not taking away anybody’s right to do something. We’re simply making it different for them in how they do it,” said Bloomberg at the All Things Digital Conference in Rancho Palos Verdes Calif. on Thursday.
Knowing the calorie count of a meal or food item is simple in New York City thanks to a law passed in 2008 requiring franchise eateries and restaurants with more than 15 locations to post calorie information on menus. Given that consumers can easily calculate their calories, Coca-Cola, the world’s largest beverage company, argues this new proposed ban is overkill.
“The people of New York City are much smarter than the New York City Health Department believes,” the company said in a statement. “We are transparent with our consumers. They can see exactly how many calories are in every beverage we serve. We have prominently placed calorie counts on the front of our bottles and cans and in New York City, restaurants already post the calorie content of all their offerings and portion sizes -- including soft drinks.
"New Yorkers…can make their own choices about the beverages they purchase. We hope New Yorkers loudly voice their disapproval about this arbitrary mandate.”
Coke didn’t end the discussion there, however. Dr. Rhona Applebaum, chief regulatory officer at the company, wrote in a blog post that “searching for a silver bullet that miraculously stops obesity is just not realistic.”
She added that in 2009, Coke began placing calorie amounts on the front its packaging to ensure consumers know exactly what they’re getting, and that the 90-calorie 7.5 ounce mini can “is designed to help people manage their portions.”
But a beverage giant like Coke isn’t the only one angry about the proposed law. Stefan Friedman, spokesman for the New York City Beverage Association called the decision “over the top” in a statement sent to Fox Business.
“The city is not going to address the obesity issue by attacking soda because soda is not driving the obesity rates. In fact, as obesity continues to rise, CDC data shows that calories from sugar-sweetened beverages are a small and declining part of the American diet,” Friedman wrote. “It’s time for serious health professionals to move on and seek solutions that are going to actually curb obesity. These zealous proposals just distract from the hard work that needs to be done on this front.”
From a medical perspective, Bethany Thayer, a registered dietician and spokesperson for the Academy of Nutrition and Dietetics, says that at this point, it’s impossible to tell whether or not the city’s proposed ban will have any impact on obesity rates.
“The research isn’t available to let us know whether or not restricting or taxing foods will have an impact on obesity rates,” says Thayer. “We do know that too many sugary beverages can potentially lead to obesity, but there are so many factors that play into obesity there is no evidence to suggest that banning sizes will have any impact. This is certainly a bold way to approach the problem.”
And “bold” is just one way of putting it, says Lenard.
“If you banned everything that people could use to harm themselves, then every store in America would have to close,” he said. “If people really wanted to buy nothing but healthy foods, then health foods would be the big money maker for stores and restaurants. Unfortunately, the demand isn’t there yet. Our industry is slowly moving towards healthier options, but it can’t be rushed. This proposal would be rushing it.”
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