Coke, Pepsi and the war on Big Soda
New York City and other anti-obesity forces are talking about taxing and regulating soft drink sales. Should investors be worried?
But the soda industry provides a convenient target for politicians in cash-strapped cities because it is large and makes a product that is indefensible from a nutritional standpoint. New York Mayor Mike Bloomberg on Wednesday proposed a ban on the sale of large sugary drinks such as soda, claiming the city wanted to do something to fight obesity. There are a couple of problems with this idea.
First, I don't think it's legal to put these kinds of restrictions on a lawful product. Bloomberg is essentially picking winners and losers in the market because his proposal won't apply to fruit juices -- many of which are chock full of sugar -- and dairy-based drinks like milkshakes, which are hardly paragons of nutrition. Moreover, I don't see how Bloomberg's idea will affect obesity rates one iota. A consumer can buy two 16-ounce sodas instead of one 32-ounce one. What about people who buy large sodas to share with a friend? I suppose they will need to pass a lie-detector test.
Bloomberg isn't the soda industry's only headache.
The Center for Science and the Public Interest, which has long advocated soda taxes to fight obesity, on Wednesday announced plans to hold what it called the "first-ever National Soda Summit," whose goal is to improve public health by reducing the consumption of soda and other sugary drinks. It praised Bloomberg's plan as the "boldest effort yet to prevent obesity."
If critics are looking for a war with Big Soda, they needn't bother declaring one, because they are already winning the fight.
As CSPI itself noted in 2010, per-capita consumption of carbonated soft drinks had declined for 11 straight years, a trend it described as encouraging. Sales of diet soft drinks, which aren't that great for you either, are rising, as are those of sports drinks, many of them high in calories. I find it odd that the food police are willing to give these other beverages essentially a free pass.
Any restrictions on the sales of sugary beverages would be bad news for investors and may force companies to increase spending on developing healthier alternatives or buy smaller rivals that produce them. Such moves could eventually yield huge profits for the beverage industry but do little to shrink America's bulging waistlines.
The problem with drink-size mandates and soda taxes is they reduce the very complicated issue of obesity to a simplistic search for good guys and bad guys. People get fat and stay fat for a host of psychological and economic reasons. Making soda more expensive will only hurt the poor and penalize small businesses for selling a legal product.
Besides, many overweight consumers, including me, prefer zero-calorie sodas. The war on soda wouldn't do us much good.
Jonathan Berr is long Coke. Follow him on Twitter@jdberr.
Has anyone given any thought to perhaps putting responsibility for obesity on the person who is drinking a case of soda a day and eating 4 hamburgers? Why is it always someone else's place to try and fix something that is wrong? Why should some mayor of any state step up to the microphone and declare a ban on anything? Who made him the cookie monster guard dog?
This entire case is rediculous. Let us just stop making coke and any other product that someone feels is the problem to obesity and pretty soon we can just eat seaweed....
This is typical. Let's not worry about our trillions of dollars of debt and worry about banning or taxing goods. If health care wasn't one of the dirtiest industries with insurance and drug companies then we wouldn't be in so much trouble on this end of the spectrum.
What about the people who aren't overweight? They can't buy the big drinks either? The goverment can't cure obesity. They can only tell us what we can and can't buy and thats not helping. If anything, this will just make it worse.
What about anorexics? They have to eat healthy too? How about making a law saying they have to offer high calorie sugary drinks, food cooked in transfat, and a little pot to give them an appitite? All the young girls who look up to superskinney supermodels, who starve themselves to be like them. Thats a huge problem too.
Noone should have the right to tell me what I can buy. or eat. or smoke. My body, My choice. The goverment needs to get out of our kitchens and go do something else!
Must be 18 or older to buy McDonalds... must show ID.
It is OK to walk into a fast food place and order 12 BiGBurgers, 12 XLarge Fries, A 2 Gallon MIlk Shake , and a 16oz Coke because you won't have to worry about obesity if you limit your sugary drink intake.
More Idiotic government regualtions that do nothing to solve anything.
Bloomberg is a bigger Idiot than Obama!!!!!
But continue to drink your "Zero Calorie - soda" and be overweight.
first you say it's not fair to limit drink sizes
2nd you say it won't make a difference because people will buy 2 so what's the problem with that?
3rd you mention that juices are packed with sugar and you forget they are also packed with vitamins.
last make a vague reference to a soda tax without discussing so much as a proposal for such a tax but lets weigh the pros and cons of said unspecified tax.
pro: 1: the increased revenue will help offset the cost of healthcare caused by the product and those who consume it. While being paid for by those who consume it: a very conservative Ideal 2: people will start drinking more (gasp) water... maybe
Cons : people will drink less soda... maybe
Don't get me started on diet drinks just google the diet drink side effects
and how exactly is this supposed to hurt the poor again? you just kinda through that out there but you didn't justify it.
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