Stephen Foley: Why Americans have got themselves in a froth over super-sized soft drinks
Stephen Foley is a former Associate Business Editor of The Independent, based in New York. He left in August 2012. In a decade at the paper, he covered personal finance, the UK stock market and the pharmaceuticals industry, and had also been the Business section's share tipster. Between arriving with three suitcases in Manhattan in January 2006 and his departure, he witnessed and reported on a great economic boom turning spectacularly to bust. In March 2009, he was named Business and Finance Journalist of the Year at the British Press Awards.
Saturday 02 June 2012
US Outlook The image of the sedentary, pop-swilling American is more than a stereotype; one in three people here is obese, and the numbers are going up, along with the incidences of chronic disease, such as diabetes, that disproportionately afflict the overweight. There are many causes, inevitably, but one villain in particular is in the sights of government: the fizzy drinks industry.
Pepsi and Coca-Cola are howling with rage at a proposal this week by the Mayor of New York, Michael Bloomberg, to ban the sale of fizzy drinks in servings of more than 16 ounces. (A can of Coke is 12 ounces.) Despite their protestations, this is neither an example of a nanny state, nor the thin end of a new wedge, but it is a harbinger of the pressures to come on the industry.
Mr Bloomberg's "big cup ban" affects only full fat soda, not diet drinks or milkshakes and smoothies, and it only applies to drinks sold in restaurants, cinemas and stadiums, not to the local supermarket, but it is likely to have a measurable effect on consumption. The Mayor is taking a lesson from the world of technology, where companies like Facebook have learnt that they can radically change people's behaviour by changing the default settings on things like privacy.
There is nothing at all to stop the greedy guzzlers from grabbing two servings, so I would be pretty sceptical of any fizzy drinks lobbyist who paints this as an assault on civil liberties. Coca-Cola fulminated that "the people of New York City are much smarter than the New York City Health Department believes and they can make their own choices about the beverages they purchase". And indeed, they still can.
The right way to think of the big cup ban is as an incremental regulation of the food business, not any more onerous than having to have the right kind of sinks and sanitary equipment in the restaurant kitchen so as not to poison the customers. Numerous such regulations exist, with positive effects, big and small. Since 1998, when the Food and Drug Administration here mandated that folic acid be added to rice, bread and corn meal, certain birth defects have been cut by a third.
The nearest analogous regulation I can think of is the ban in the UK on selling aspirin in packets of more than 16. That means no one is likely to have a suicidal dose in their medicine cabinet; it won't deter someone who really wants to overdose, but it might throw enough sand in the gears to get them to change their mind.
Mr Bloomberg's ban is a gentle nudge on consumer behaviour, not an assault on American freedom, and my guess is he will get his plan approved. Then, as with the smoking ban pioneered in this city more than a decade ago, you can expect other authorities across the US and beyond to follow.
After years of underperformance, investors have been clamouring for Pepsi and Coca-Cola to refocus back on their highly profitable fizzy drinks businesses, instead of pouring money into the acquisition and marketing of healthier alternatives. That may not be the right strategy.
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