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Posts Tagged ‘sugary drinks’

Banned In the Cage: How Xyience and NOS Unfairly and Deceptively Market Energy Drinks

Tuesday, August 13th, 2013

by Cara Wilking, J.D., Rebecca Leff and Katelyn Blaney

NOS can

The Ultimate Fighting Championship (UFC) has its roots in “cage-fighting” and was long considered too wild and violent for mainstream sports fans. Not long ago cage-fighting was shunned by parents, banned by states and rejected by broadcast networks and cable operators for its brutality. While cage-fighting remains outlawed in some states, it has been recast as mixed martial arts (MMA). UFC has successfully migrated from pay-per-view television to the Fox Television broadcast network. Despite the UFC’s efforts to rehabilitate its image, bouts are still held in an eight-sided cage (called the “octagon”) where fighters’ blood is commonly spilled. The UFC has an official energy drink called Xyience Energy. NOS energy drink (a Coca-Cola Company product) sponsors MMA champion Georges St-Pierre and has built an ad campaign around the UFC champion. UFC fighters appear on cans of Xyience, attend promotional events and wear the Xyience logo. According to the president of Xyience, UFC fans, who are two thirds male, between the ages of 21 and 34 are the company’s target demographic.

Energy Drinks Are Associated with Increased Risk-Taking, Including Fighting

Energy drink composition, marketing and consumption are currently under investigation by state and federal regulators. Energy drink consumption has been linked to adverse health events including caffeine intoxication, dehydration and even death. Moreover, a 2008 study found that frequent energy drink consumption by young adults, particularly young white males, was positively associated with risk-taking including fighting. The study concluded that energy drink consumption is closely associated with problem behavior syndrome. The group the study found to be most at risk overlaps with Xyience’s target demographic.

Six States and the Association of Ringside Physicians Ban the Use of Stimulant Drinks During MMA Fights

UFC champion Ronda Rousey holding a can of Xyience in the ring after a bout in California.

UFC champion Ronda Rousey holding a can of Xyience after a 2013 bout in California.

In order to protect the safety of combatants, Arkansas, Florida, Michigan, Ohio, Oklahoma, and Wisconsin ban the use of energy drinks during professional or amateur mixed martial arts bouts.  Click here for a legal summary of these policies.  State athletic commissions require that a physician be present ringside during mixed martial arts bouts. The Association of Ringside Physicians, a group created “to develop medical protocols and guidelines to ensure the safety and protection of Professional Boxers and MMA Athletes,” stipulates that “only water or an approved electrolyte drink by the Commission may be consumed during the bout,” and “[c]ontestants should not consume energy drinks on the date of the contest.”

The Cross-Promotion of UFC and Energy Drinks Is Unfair and Deceptive to Young Consumers

UFCPoster

This poster is featured on the Xyience website advertising a bout in Milwaukee Wisconsin. Wisconsin bans the use of energy drinks during MMA fights

Marketing energy drinks alongside cage-fighting warrants further investigation as a potentially unfair and deceptive trade practice under state and federal consumer protection law. A deceptive trade practice is a marketing tactic that is likely to mislead a reasonable member of the target audience and is material to the consumer’s decision to purchase the product. A reasonable member of the target audience of UFC fans would be misled into thinking that energy drinks are permissible during bouts. The reasonable consumer likely does not know that energy drinks are actually banned during bouts in six states and by the Association of Ringside Physicians. This omission is not easily discovered by consumers as one has to search state athletic commission regulations to find such information. The cross-promotion of UFC and energy drinks is material to the target demographic because there are a number of energy drinks on the market that do not cross-promote UFC. Placing the UFC logo or pictures of a UFC fighter on a can and sponsoring top UFC fighters is intended to drive UFC fans to select drinks like Xyience and NOS over other energy drinks.

Energy drink cross-promotion of UFC may also be considered an unfair trade practice in jurisdictions that focus on marketing that violates established public policies. As noted above, six states and the Association of Ringside Physicians ban the use of energy drinks during fights. Marketing that associates energy drink consumption with UFC violates these established public policies and presents a potential health harm to the target audience of consumers—a demographic of energy drink users research has shown already is susceptible to engaging in risky behavior like fighting.

Energy Drinks and Fighting Don’t Mix

Xyience and NOS should abandon their association with UFC and MMA. Current marketing campaigns are unfair and deceptive to the target audience of consumers. Consumers deserve the same protections six states and the Association of Ringside Physicians extended to professional and amateur MMA athletes when they banned the use of energy drinks during bouts.



NYC’s new soda size restriction should survive any legal challenge (but, so far, hasn’t): An Update

Tuesday, July 30th, 2013

Update:  July 30, 2013

At this point, the Supreme Court of NY County (March 11, 2013) and the Supreme Court, Appellate Division, First Dept. (today) have ruled that the sugary beverage serving size cap in New York is invalid. The case name is: In re New York Statewide Coalition of Hispanic Chambers of Commerce, et al. v. New York Dept. of Health and Mental Hygene, et al..

Clearly, I was mistaken in my prediction (see original post below) that the measure would survive a legal challenge.  While the City will seek review by the Court of Appeals of the State of New York (the state’s highest court), this has clearly turned into an uphill battle for Mayor Bloomberg and the City at this point.

Interestingly, the beverage industry has (so far) successfully relied on a case brought by the tobacco industry in the 1987 to successfully the stop the NY Health Council from taking steps to regulate smoking in public places.  At that time, it was politically impossible to get the state legislature to enact smoking restrictions in public indoor areas and limit smoking in restaurants. Such a measure was viewed as an extreme infraction on smokers’ rights.  In that case,  Boreali v. Axelrod, the court held that for several reasons, only the legislature was suited to enact such a restriction.  Those same reasons are cited in today’s decision reinforce the impression that many of the same societal changes and setbacks experienced in tobacco control are playing out around obesity prevention policy.

  1. In Boreali, the Court found that the administrative health agency took economic issues into account by exempting restaurants and bars from smoking bans.  Economic concerns are beyond the scope of a health agency’s legal authority. In today’s decision, the fact that NYC exempted convenience stores and bodegas was interpreted as an economic concession (despite the City’s strong arguments to the contrary).
  2. In Boreali, the fact that the state legislature had previously rejected smoking bans suggested that it was inappropriate for a health agency to go ahead and do an end-run around a matter previously before the legislature.  Likewise, in today’s decision the Court found that the NY City Council has “targeted” sugary beverages in the past, so this subject matter should be off-limits to the Board of Health.
  3. In Boreali, the Court ruled that the fact that the health agency was drafting a new type of restriction was evidence that it was “writing on a clean slate” rather than tweaking or otherwise perfecting an existing restriction that was clearly within its purview. Same thing here.  It was a new and innovative regulation which, according the this Court’s reasoning, is why it ought to be handled by a legislative body rather than an administrative agency.
  4. Finally, the Court in Boreali found that a simple no-smoking rule did not involve expertise in health matters.  In today’s decision, too, the Court found that a simple beverage size ban did not require health expertise and, therefore, is beyond the scope of authority granted to the Board of Health.

Under today’s ruling, any one of these four factors could invalidate agency action. Such strict application of Boreali  may ultimately represent chilling new limits on the powers of health boards in New York state.

While analysts may disagree over whether the Court’s decision today was a well-reasoned one, and it may yet be subject to further appellate review, it is important to note that it is basically a dispute about New York law and not a fundamental legal problem with placing limits on serving sizes for sugary beverages that is at issue.

But that said, the real disagreement may be more about evolving norms surrounding sugary beverages than about administrative authority.  As norms around tobacco use evolved over time, Boreali is increasingly seen as an example of the tobacco industry gaining a temporary victory at the cost delaying the protection of the public’s health.  Perhaps today’s decision will be seen in a similar light in the not-too-distant future as norms around sugary beverages continue to evolve.

-Mark Gottlieb, J.D., Executive Director
Public Health Advocacy Institute at Northeastern University School of Law

 

Original Post
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Today the New York City Board of Health approved first-in-the-nation limits on the maximum size of sugary drinks served in restaurants, theaters, and sports venues. The vote was 8-0 in favor of adopting the regulation with one abstention. Grocery and convenience stores are exempt and diet drinks, juices, and drinks that are 50% of more milk (or milk substitute) are excluded.

While the measure drew ire from critics throughout the political spectrum, and has been inaccurately characterized as a “ban,” it has succeeded in invigorating the debate on the role of sugary drinks in obesity and the role of government to encourage  mindful consumption.  Such mindful consumption will begin 6 months from today when the new rule should go into effect.

In the meantime, there may be efforts by big drink stakeholders to challenge the regulation.  One such group, New Yorkers for Beverage Choices, a group closely aligned if not controlled by the American Beverage Association, has hinted at such a challenge.  The pro-business think tank, the Washington Legal Foundation, has published comments on the measure that suggest the basis for a legal challenge. A credible legal challenge could result in the granting of a injunction that could delay or derail the beverage size restriction. However, there appears to be little chance that such a challenge will lead to any measure of success.

The Washington Legal Foundation’s primary legal argument to oppose the measure is that it is the type of action that is normally reserved for legislation rather than rule-making by an administrative agency. The problem with that argument is that regulating serving sizes of sugary drinks in food establishments is clearly within the New York City Department of Health and Mental Hygiene’s authority to protect the public’s health under the City Charter’s sec. 558 and to engage in rule-making under sec. 1043.  The Washington Legal Foundation public comments cite to a 1980s case, Boreali v. Axlerod. The case involved an early New York non-smoking rule that was overturned primarily because the state’s Public Health Council considered the economic impact of the restriction on businesses and offered waivers for those that could show financial hardship. This went beyond the Public Health Council’s legal authority to issue rules based solely on protecting health.  Here, however, there is no waiver process and no consideration by the Board of Health of the economic impact this rule might have on businesses.

A second issue raised by the Washington Legal Foundation is that the problem of obesity is an important issue of concern to society and that dealing with such social issues is best left to legislative bodies rather than regulatory agencies.  Citing again to the Boreali case, WLF suggests that this is a matter that it should only be addressed by elected officials and not agency appointees.  Essentially, they are making a philosophical rather than a legal argument.  Legally, this rule-making is very clearly within the agency’s purview.

In yesterday’s New York Times, an attorney who has previously represented New York restaurants suggested that the rule could be overturned on Constitutional grounds.  This would be a reference to the Commerce Clause (Art. I, Sec. 8, Clause 3 of the U.S. Constitution) which grants Congress the power to regulate commerce among the states.  If a state or, as in this case, a political subdivision of a state, passes a law or rule that substantially affects interstate commerce, it is possible that a court would find that the Commerce Clause reserved that power to Congress and the law or rule would be found to be unconstitutional. However, in this instance, there is virtually no argument that could be made that the beverage size rule could affect interstate commerce any more than the cup size could be found to be a form of free speech that the rule unconstitutionally restricts.  Neither argument is credible enough to argue in a court room.

There is virtually no chance that the rule will be successfully challenged.  Either threats of litigation will not materialize or, if they do, will be quickly dismissed. That result will encourage other communities to replicate the courageous  action taken in new York City by Mayor Bloomberg and the Board of Health.

-Mark Gottlieb, J.D., Executive Director
Public Health Advocacy Institute at Northeastern University School of Law

 

 



PHAI’s Friedman and Gottlieb Co-author: “Soda and Tobacco Industry Corporate Social Responsibility Campaigns: How Do They Compare?” in PLoS Medicine

Tuesday, June 19th, 2012

PHAI senior staff attorney Lissy Friedman and executive director Mark Gottlieb collaborated with Lori Dorfman, Andrew Cheyne and Asiya Wadud of the Berkeley Media Studies Group to produce this article published today in PLoS Medicine.

Soda companies’ PR campaigns are bad for health:

Health advocates need to organize strong public health campaigns to educate the public and policymakers about the dangers of both sugary beverages and the misleading industry corporate social responsibility campaigns that distract from their products’ health risks, according to US experts writing in this week’s PLoS Medicine.

In a Policy Forum article, the authors (media and public health experts from the Berkeley and Boston, USA) examined prominent campaigns from industry leaders PepsiCo and Coca-Cola, that, according to the authors, have embraced corporate social responsibility (CSR) with elaborate, expensive, and multinational campaigns.

The authors say that while soda companies may not face the level of social stigmatization or regulatory pressure that now confronts Big Tobacco, concern over soda and the obesity epidemic is growing.

In response to health concerns about their products, the authors argue that soda companies have launched comprehensive CSR initiatives sooner than did tobacco companies but that these campaigns echo the tobacco industry’s use of CSR as a means to focus responsibility on consumers rather than the corporation, bolster the companies’ and products’ popularity, and to prevent regulation.

However, unlike tobacco CSR campaigns, soda company CSR campaigns explicitly target young people and aim to increase sales.

The authors say: “It is clear that the soda CSR campaigns reinforce the idea that obesity is caused by customers’ “bad” behavior, diverting attention from soda’s contribution to rising obesity rates.” They continue: “For example, CSR campaigns that include the construction and upgrading of parks for youth who are at risk for diet-related illnesses keep the focus on physical activity, rather than on unhealthful foods and drinks. Such tactics redirect the responsibility for health outcomes from corporations onto its consumers, and externalize the negative effects of increased obesity to the public.”

The authors argue: “Emerging science on the addictiveness of sugar, especially when combined with the known addictive properties of caffeine found in many sugary beverages, should further heighten awareness of the product’s public health threat similar to the understanding about the addictiveness of tobacco products.”

They conclude: “Public health advocates must continue to monitor the CSR activities of soda companies, and remind the public and policymakers that, similar to Big Tobacco, soda industry CSR aims to position the companies, and their products, as socially acceptable rather than contributing to a social ill.”

This article is one in a PLoS Medicine series on Big Food that examines the activities and influence of the food and beverage industry in the health arena. The series runs for three weeks beginning 19 June 2012 and all articles will be collected at www.ploscollections.org/bigfood. Twitter hashtag #plosmedbigfood

Funding: This research was supported by the Healthy Eating Research program (http://www.healthyeatingresearch.org/) of the Robert Wood Johnson Foundation, grant #68240. The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

Download the article here.



The Hidden Energy Costs of School Beverage Vending Machines

Thursday, June 7th, 2012

PHAI has produced a FACT SHEET detailing state-by-state electricity costs of traditional cold beverage vending machines. A traditional cold beverage vending machine consumes an estimated 3000 kilowatt hours of electricity per year (kWh/yr). That translates to an average annual energy cost of $313 per machine. Even more energy efficient machines still use between 1200 and 1500 kWh/yr. When multiplied over the total number of machines housed on school property, the electricity cost required to operate cold beverage vending machines amounts to a significant hidden expense for schools that should be subtracted from school beverage vending revenue and taken into consideration when deciding whether or not to renew a beverage vending contract.

 



Organizations that Care About Health Should Play No Part in the Soft Drink Industry’s Effort to Rehabilitate Its Public Image

Monday, June 20th, 2011

by Cara Wilking, J.D.

CLICK HERE DOWNLOAD THIS POST AS A PDF

INTRODUCTION

The United States has the highest per capita rate of carbonated soft drink consumption in the world at 736 eight-ounce servings or 46 gallons per person in 2009.[1] The soft drink industry is dominated by three major companies: The Coca-Cola Company (“Coke”), PepsiCo. (“Pepsi”), and Dr. Pepper Snapple (“DPS”).  Soft drink companies produce concentrate and fountain syrup, and are responsible for marketing existing products and developing new products. Bottlers mix concentrate from soft drink companies and mix it with sweeteners and water to produce bottled and canned beverages. The American Beverage Association (“ABA”) is the industry association representing the non-alcoholic beverage industry. While the United States still has the highest per capita consumption of carbonated soft drinks in the world, overall sales of full-sugar carbonated soft drinks have been declining in recent years. In response to this decline in sales, the soft drink industry has reinvigorated its efforts to engage the public via corporate social responsibility tactics designed to rehabilitate the image of its products.

SOFT DRINK INDUSTRY CORPORATE SOCIAL RESPONSIBILITY

As large corporations, Coke, Pepsi and DPS, all undertake corporate social responsibility (CSR) campaigns. Corporate social responsibility generally encompasses a company’s activities and value statements with respect to philanthropy, community, workplace diversity, safety, human rights, and environment. There are various reasons why companies pursue CSR including: organizational values, reaction to threats to transaction costs, brand and competitive positioning, marketing, publicity, and innovation.[2] Concerns generally motivating the soft drink industry’s CSR efforts are evident in The Coca-Cola Company’s 2009 Annual Report:

Consumers, public health officials and government officials are becoming increasingly concerned about the public health consequences associated with obesity, particularly among young people. In addition, some researchers, health advocates and dietary guidelines are encouraging consumers to reduce consumption of sugar-sweetened beverages, including those sweetened with HFCS or other nutritive sweeteners. Increasing public concern about these issues; possible new taxes and governmental regulations concerning the marketing, labeling or availability of our beverages; and negative publicity resulting from actual or threatened legal actions against us or other companies in our industry relating to the marketing, labeling or sale of sugar-sweetened beverages may reduce demand for our beverages, which could affect our profitability.

When faced with such public concern, CSR efforts aim at “legitimizing a corporation’s activities and increasing corporate acceptance.”[3] Philanthropy and cause-marketing campaigns are key parts of the soft drink industry’s CSR efforts.

Soft Drink Industry Philanthropy

Coke and Pepsi both have corporate foundations that make grants to non-profit organizations and institutions.  In 2008, the Coca-Cola Foundation Inc. made over $36 million in grants to organizations worldwide.[4] In 2009, the PepsiCo. Foundation, Inc. made $27.9 million in domestic grants.[5] In order to receive a grant, applicants must engage in work that meets the stated goals of the foundation, make an application and, once funded, follow the grant guidelines. The Coca-Cola Foundation and the PepsiCo. Foundation are required to publicly disclose grant recipients and total assets and expenditures to the Internal Revenue Service in order to maintain tax-exempt status.

Soft Drink Industry Cause-Marketing Campaigns

The use of cause-marketing campaigns is a growing trend facilitated by the rise of social networking online. Also referred to as “cause-related marketing,” cause-marketing traditionally has been defined as “a mutually beneficial collaboration between a corporation and a nonprofit in which their respective assets are combined to: create shareholder and social value; connect with a range of constituents (be they consumers, employees, or suppliers); and communicate the shared values of both organizations.”[6] Cause-marketing is distinct from corporate philanthropy because the corporate funds distributed “are not outright gifts to a nonprofit organization, so they are not treated as tax-deductible charitable contributions.”[7]

The Pepsi Refresh Project is an example of a cause-marketing campaign. Pepsi-Refresh is a program whereby members of the public submit ideas with a funding request and vote on whether or not to fund the concept. In 2010, PepsiCo pledged $20 million in funds for the Refresh campaign. This amount is distinct from its corporate foundation giving made through the PepsiCo Foundation and, as a marketing expenditure, is not subject to the same public disclosures required of private foundations. The underlying goal of the Pepsi Refresh cause marketing campaign is to sell more Pepsi products. When asked if Pepsi Refresh has been successful, Melisa Tezanos, Communications Director of PepsiCo Americas Beverages, replied:

Pepsi Refresh has been an overwhelming success. With over 2.8 billion (with a “B”!) earned media impressions, the project exceeded our internal benchmarks early in the year and we’ve seen an improvement in key brand health metrics. In fact, when Millennials, an important cohort group for Pepsi, know about the Refresh Project their purchase intent goes up.[8]

Ms. Tezanos clearly defines “success” not in terms of work done in the community funded by the program, but rather in terms of increasing the profile of Pepsi products and increasing sales amongst a key demographic. Social media is an important tool in cause-marketing campaigns as it facilitates the sharing of campaign materials that are embedded with product advertising and enables individuals to recruit other individuals to the campaign with relatively little effort.

ENSURING THE INTEGRITY OF YOUR ORGANIZATION’S HEALTH PROMOTION EFFORTS

The practical reality is that soft drinks are now for sale in almost every venue, e.g. hospitals, universities, youth centers, and public buildings via vending machines and on-site retail establishments.  In addition, corporate philanthropy by the soft drink industry and other private companies provides funding to a number of institutions and organizations that also have an interest in health promotion.  While organizations should re-examine traditional arms-length business relationships and donor/recipient relationships, emerging soft drink industry corporate social responsibility efforts that use cause-marketing and public relations tactics require special attention.  As part of a deliberate CSR strategy, these campaigns are embedded with product advertising, and often require participants to enlist other participants via social networking online. In addition, cause-marketing seeks to build an association between a company’s products and a trusted non-profit organization in order to build market share.  Organizations that care about health should establish a policy that identifies and distinguishes between traditional business relationships, corporate philanthropy and cause-marketing and should commit to not participate in cause-marketing campaigns that promote products, such as sugary drinks, that pose a public health threat.


[1] Beverage Digest, Special Issues: Top-10 CSD Results for 2009 (March 24, 2010), http://www.beverage-digest.com/pdf/top-10_2010.pdf.

[2] Michael J. Maloni & Michael E. Brown, Corporate Social Responsibility in the Supply Chain: An Application in the Food Industry, 68 J. Bus. Ethics 35, 36 (2006).

[3] Guido Palazzo & Ulf Richter, CSR Business as Usual? The Case of the Tobacco Industry, 61 J. Bus. Ethics 387, 390 (2005).

[4] The Coca-Cola Foundation, Inc., 2008 Form 990-PF.

[5] PepsiCo. Foundation, Inc. 2009 Form 990-PF.

[6][vi] The Foundation Center, Frequently Asked Questions, http://foundationcenter.org/getstarted/faqs/html/cause_marketing.html.
[7] Id.

[8] Christie Garton, Pepsi exec dishes on Pepsi Refresh, future plans for cause marketing, USA Today (Nov. 5, 2010).

 



PHAI’s Wilking urges repeal of MA sales tax exemption for soda as first step in Boston Globe Letter to Editor

Friday, May 20th, 2011

In a May 18, 2011 Letter to the Editor published in the Boston Globe, PHAI Staff Attorney Cara Wilking argues that elimination of the sales tax exemption for sodas is a reasonable first step to reduce the impact of sugary drinks on obesity.  However, a per ounce excise tax would have a more significant impact, according to Wilking.




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