Bloomberg's Soda Ban Struck Down, for Now

For many beverage packagers, New York City has been a place of interest in the recent past.  New York mayor Michael Bloomberg has seemingly made it his personal initiative to fight obesity in the Big Apple, though his methods are questionable, to say the least.  Bloomberg's fight against "supersized" sweetened drinks took a hit this week when a judge struck down the rule that would limit the size of certain high sugar drinks in certain locations.

 

In general, this rule against large drinks was set to ban sugary drinks over sixteen ounces in size.  However, the ban did not apply to all sugary drinks.  Similarly, the ban did not reach all establishments, omitting grocery stores and convenience stores, among others.  Finally, the 16 ounce limit still allowed both men and women to exceed the recommended amount of daily added sugar intake by drinking a single soda, leading the judge in the case to term the rule "arbitrary and capricious".  Also, anyone ever hear of a refill?  

 

While a setback to Mayor Bloomberg's plan, the unfortunate end result could be a more thorough ban on sugary drinks, as the mayor and his supporters will likely attempt to restructure the rule to make it more all-encompassing based on the criticism of the judge.  Other states will be watching closely as the ban is appealed and/or the rule restructured as similar attacks on sugary drinks are being discussed and considered around the country.  

 

With an eye on bottled water and soft drinks, New York is not the only area of late to seemingly attack the beverage industry.  While some of the proffered reasons for the attacks center on the environment and the packaging used, other arguments focus on health related benefits.  However, not only can questions be raised regarding the right of elected officials to make these health related choices for individuals, but these points are hard to swallow when alcohol and tobacco are freely available to the public and not attacked by the same people who want to limit our intake of Coke and Pepsi.  

 

Unfortunately, these rules, regulations and bans have an effect on the packagers of the product, whether they are upheld or not.  The effect on the packagers will, in my opinion, be passed on to the consumer.  Assuming such a rule does take effect, some packagers may find themselves in possession of packaging equipment that is simply no longer productive.  Packaging machinery, such as filling machines and capping machines, are manufactured to handle certain bottle sizes, or a range of bottle sizes.  Production demands for specific bottle sizes will undoubtedly change after a rule such as Mayor Bloomberg's is adopted.  Some facilities may find their packaging machinery obsolete, requiring the purchase of new equipment.  Even if the rule is found invalid, as in the New York case, packagers must anticipate the changes and assume the looming deadlines are valid.  In these cases, changes may be adopted, or even just anticipated, that cost the packagers time and money.  

 

So how is this money spent by the packaging companies recuperated?  Not through the government, but likely through higher prices to the consumer, and likely for smaller amounts of product.  One has to question the thought process - or lack of one - behind such a rule as the one in New York, given the cost to packagers, the likely cost to consumers and the ease (refills!) in which the rule itself can be sidestepped.  In a word, Mayor Bloomberg would be better off fighting drugs, crime, poverty or other issues in his great city.  His fight against the beverage industry simply does not make sense, financially or otherwise.