Commentary: NYC soda ban proposal will require a tough fight from restaurants

 
June 8, 2012 | by Alicia Kelso

When New York City's menu labeling law went into effect in 2006, plenty of people accused city government of nanny state politics.

Fast forward to now and a similar law is about to go into place at the federal level, preempting NYC's and other similar ordinances that followed the Big Apple's lead. Six years later and the controversy surrounding that initial proposal seems somewhat laughable now. Collectively, New York restaurants complied and carried on with their day-to-day operations.

A similar "nanny state" chorus erupted last week when NYC Mayor Michael Bloomberg proposed a ban on soda in an effort to curb rising obesity rates. The New York Times first broke the story, setting off a stark division among New Yorkers.

According to a survey held over the weekend by NY1-Marist, 53 percent of New Yorkers disagree with the proposal, while 42 percent praised the concept.

The proposal would prohibit the sale of any sweetened drink, including energy drinks and pre-sweetened tea, larger than 16 fluid ounces. The measure would not apply to diet soda, fruit juice, dairy-based drinks (including milkshakes), or alcoholic beverages.

It will officially be submitted to the New York City Board of Health next week, and could go into effect as early as March 2013 if it passes.

If approved, inspectors would likely begin enforcing the ban within six months. Restaurants that don't comply could face a $200 fine.

Whether the idea will have any effect on the public's well being is yet to be seen. Such a ban, however, will  have a detrimental effect on New York restaurants' bottom lines. Soft drinks, after all, carry high margins.

To put the proposed mandate into perspective, one Edward Jones analyst estimates that McDonald's pulls in about 5 percent of its U.S. sales from soft drinks.

Fountain drinks make up about 24 percent of the 9.3 billion cases of soda sold a year, according to Beverage Digest. The market is worth $75.7 billion.

Unsurprisingly, the restaurant industry isn't happy about the proposal. McDonald's sent out a tweet June 1, two days after Bloomberg first pitched the idea, which said: "@MikeBloomberg We trust our customers to make the choices that are best for them."

That same day, the New York State Restaurant Association also released an extensive response.

"We appreciate the Mayor's concern for public health, but the current proposal goes much too far," said Andrew Moesel, spokesman for the NYC Chapter of New York State Restaurant Association. "No one understands private enterprise and business better than the mayor. People want choices. Restaurants are serving the public what it wants and we all hope that will continue. If we want New York City to remain the restaurant capital of the world, we must stop placing these burdensome restrictions on what can and can't be served here."

Rick J. Sampson, NYSRA's president and CEO, added that if Bloomberg really was focused on reducing obesity levels, the proposed ban also would apply to grocery and convenience stores, which it does not.

Coca-Cola jumped in on defense as well, issuing the following statement: "New Yorkers expect and deserve better than this. They can make their own choices about the beverages they purchase." The company called the mandate "arbitrary," and noted that it already includes calorie information on bottles and cans, as do the restaurants in which it is sold.

Mayor Bloomberg's goal is to get the message across that super-sized, sugary drinks are "detrimental to your health" and that consumers need to do a better job choosing reasonable portion sizes.

Aside from the restaurant industry crying foul over the proposal, many readers from both the Reuters and New York Times stories have asked why Bloomberg doesn't propose a higher tax instead of a full-out ban. Higher taxes have long been used as a method to control high alcohol and cigarette use.

Other readers said consumers will easily find loopholes through self-service refills now offered by so many QSRs. And a majority think there are simply better ways to curb obesity than a ban, such as educational initiatives.

Still, peppered throughout story comments and survey results are consumers who agree with Bloomberg. "If it saves lives, and much needed dollars in our medical system, it will have been a good thing," wrote one respondent.

Another reader blamed the restaurant industry's portion control abandonment for the ban's support: "Twenty years ago, I would have gotten an 8 oz cup. Now I get a 16 oz cup. People keep claiming you have a 'choice' to eat healthy, but you really don't. Today, you not only can't trust restaurants to do what's best for your health, you can't even expect them to give you the option to eat a small portion. This is a last-resort law because portion sizes have gotten absurd -- and the government is footing the bill through health care ... Sugary drinks are the number one contributing factor to obesity, in terms of calories, compared to how we ate 20 or 30 years ago. People may hate Bloomberg for this, but my money is that it will help."

Bloomberg's ideas to get New York's citizens on a healthier track have been met with resistance before (in addition to the menu labeling mandate, a citywide smoking ban in restaurants passed a few years ago) but they ended up prevailing.

Perhaps that explains why food and beverage players have come out swinging and may even have a long fight ahead of them.

Read more about health and nutrition.

Alicia Kelso is editor of PizzaMarketplace.com and QSRweb.com. Both sites, along with FastCasual.com, are published by Networld Media Group.  


Topics: Coffee / Specialty Beverages , Food & Beverage , Health & Nutrition , Operations Management , Policy / Legislation , Trends / Statistics


Alicia Kelso / Alicia Kelso has been a professional journalist for 15 years. Her work with QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.
View Alicia Kelso's profile on LinkedIn

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