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Why Coke and McDonald's balk at big-drink ban in Big Apple (+video)

Big Drink Ban: New York is a mega-market, but more importantly, the city sets the pace for other cities. Coke and other soft drink companies see trouble if the New York City big-drink ban spreads.

By Martinne GellerReuters / June 1, 2012

New York City Health Commissioner Thomas Farley, accompanied by Deputy Mayor for Health and Human Services Linda Gibbs, at a news conference May 31, 2012 proposing a ban on the sale of large sodas and other sugary drinks in the city's restaurants, delis and movie theaters in the hopes of combating obesity.

(AP Photo/Richard Drew)

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New York

Coca-Cola Co and McDonald's Corp slammed a proposed limit on soft drink sales in New York City that would turn a small McDonald's drink into the new large and could trigger a wave of similar restrictions aimed at curbing obesity.

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"New Yorkers expect and deserve better than this. They can make their own choices about the beverages they purchase," Coca-Cola said in a statement on Thursday. Coke dominates the U.S. fountain drink market, and would likely be the most hurt.

On Wednesday, Bloomberg proposed amending the city's health code to ban the sale of soft drinks in cups larger than 16 ounces, a size equal to what McDonald's calls small. The chain's medium is 21 ounces, and its large is 32 ounces. Its kids' size is 12 ounces.

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"This raises the specter of this going to other cities as well," said Bernstein Research analyst Ali Dibadj. "These companies may have to start playing whack-a-mole if this gains momentum."

Heather Oldani, a spokeswoman for McDonald's, the world's biggest hamburger chain, said fighting obesity requires "a more collaborative and comprehensive approach".

"Public health issues cannot be effectively addressed through a narrowly focused and misguided ban," Oldani said. She declined to say how much of

McDonald's revenue comes from soft drinks, but Edward Jones analyst Jack Russo put it at around 5 percent.

The ban would apply to restaurants, mobile food carts, delicatessens and concessions at movie theaters, stadiums and arenas where sales of fountain drinks are common. It would not apply to convenience, grocery or drug stores, which mostly sell beverages in bottles and cans. That means 7-Eleven's Big Gulp would not be covered by the proposed ban.

The proposal, which would exclude diet and dairy-based coffee drinks, must be approved by the city's Board of Health.

"You can still be a beast. We're not keeping you from eating fattening foods or drinking 32-ounce bottles of full-sugar drinks," Mayor Bloomberg told the All Things Digital gathering in Rancho Palos Verdes, California on Thursday via video conference. "We are just telling you that this is detrimental to your health and making you understand that by portion size."

Bloomberg's assault on super-sized sodas opened a new front in the battle over how local governments regulate in the name of health what people eat and drink.

Public health advocates who have been fighting America's growing obesity problem say portion control is key to weight management.

"There's very strong scientific evidence that when people are served more they eat more, or in this case drink more," said Kelly Brownell, director of Yale University's Rudd Center for Food Policy and Obesity. Brownell applauded the proposal.
"My guess is this will affect enough people in a strong enough way to create a pretty significant public health benefit," he said.

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