New York City OKs Soda Restrictions

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"Supersize me" just got a lot more complicated in New York City. The city's Board of Health today approved a ban of sales of non-diet soft drinks over 16 ounces. The restriction is meant to address obesity concerns, but doubts about its effectiveness and anxiety about the government's role in daily life have loomed large since its initial proposal by Mayor Michael Bloomberg earlier this year.

Some proponents of the ban view it as an education tactic, more than a direct channel to trim New Yorkers' soda consumption. The city spends around $4 billion on direct medical costs every year, and 58% of adult New Yorkers are considered overweight or obese, according to the mayor. It's a national issue.


Source: cdc.gov

Opponents of the ban include fast-food companies, which view the policy as sloppy and misguided. While restaurants, movie theaters, and mobile food carts are among the venues that will have to adhere to soft-drink size limitations, convenience stores and grocery stores will be able to sell any size soda they wish. In addition, certain exceptions would allow milk-heavy drinks to avoid the calorie cap.

While soda giants Coca-Cola (NYS: KO) and PepsiCo (NYS: PEP) seem to be on the front line here, the ban likely won't affect their bottom lines too much, although the companies will surely be watching to see if other municipalities follow suit. A Bloomberg news report quoted a McDonald's (NYS: MCD) spokeswoman as saying "We are very disappointed this proposal passed. ... Public health issues cannot be effectively addressed through a narrowly focused ban." McDonald's has somewhat embraced recent health trends, announcing earlier this week that calorie counts would be included on its menus nationwide.

Coffee shops like Starbucks and Dunkin' Brands could actually increase their drinks' milk content (and thus, caloric content) to qualify for an exception to the ban. Free refills will be allowed, meaning that Yum Brands' restaurants and other fast-food joints could see consumers doubling up on 16 oz. servings, rather than purchasing a single 20 oz. beverage.

The article New York City OKs Soda Restrictions originally appeared on Fool.com.

Fool contributor Justin Loiseau owns none of these stocks. You can follow him on Twitter, @TMFJLo, and on Motley Fool CAPS, @TMFJLo.The Motley Fool owns shares of Starbucks, McDonald's, and Whole Foods Market.Motley Fool newsletter serviceshave recommended buying shares of Whole Foods Market, McDonald's, and Starbucks.Motley Fool newsletter serviceshave recommended writing covered calls on Starbucks.Motley Fool newsletter serviceshave recommended writing naked calls on Dunkin Brands Group. The Motley Fool has adisclosure policy. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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