This week, the residents of New York City are to be subject to a new law (effective March 13, 2013), banning sales by food service establishments of "sugary drinks" larger than 16 fluid ounces.  A "Sugary Drink" is defined as:
"Sugary drink means a carbonated or non-carbonated beverage that:

 (A) is non-alcoholic;

 (B) is sweetened by the manufacturer or establishment with sugar or another caloric sweetener;

 (C) has greater than 25 calories per 8 fluid ounces of beverage; and

 (D) does not contain more than 50 percent of milk or milk substitute by volume as an ingredient.”

See New York City Health Code Section 81.53.

The American Bar Association’s Forum on Franchise Listserve had a fun time toying around with the meaning of this regulation.  If, for example, a root beer was in a cup less than 16 ounces, would the addition of ice cream which went over the top of the cup be an issue?  As ice cream is a solid, would the inclusion of ice cream in a smoothie mean that a health inspector must wait for the ice cream to melt before issuing a violation?  But as ice cream contains milk, perhaps one could put in a lot of ice cream and it would count as a "milk substitute"?  These are all tongue in cheek (and not meant to guide the reader’s interpretation of the regulation!!), but you get my drift.

Clearly, this has implications for franchisors and franchisees with business in New York.  If a business wants to serve other types of non-sugary drinks in large cups or has a self-service drink station, that business will have to figure out how to make sure that these cups are not used for "sugary drinks".  In addition, businesses that produce drinks with different ingredients will have to analyze the sugar and milk content against the regulation.  

Businesses serving coffee may also have to adjust their service to customers.  Some franchised systems plan to change their procedures, not offering to put sugar in their customer’s coffees over 16 ounces but requiring their customers to do that themselves.  Some others are adopting a “wait and see” approach.  Lattes, of course, are not effected no matter the size.  For an in-depth analysis on the effect of these laws on coffee drinks, see the recent article in the New York Times.

This leads, of course, to the related question of the role of government.  Are public health issues to be reserved for diseases that are contagious?  Or should the government regulate personal health decisions? A lawsuit has been filed in the State Supreme Court in Manhattan by the soft-drink industry joined by several New York restaurant and business groups opposing this regulation.

Whatever your opinion, like smoking bans and bans on trans-fats, this trend may spread to other states.  A few states have regulated serving these types of drinks in schools and many have sales taxes above those applicable to food generally for regular soda.

The New York Times has been following this issue extensively.  To read more, please click on the following links …

Health Board Approves Restriction

Soda Industry Sues to Stop Ban