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Posts Tagged ‘sugary drinks’
NYC’s new soda size restrictions should survive any legal challenge
Thursday, September 13th, 2012
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.
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.
- Download the FACT SHEET.
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.
[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.
