Apart from the freedom of choice issues the proposed ban raises, this regulatory effort will have major bottom-line impacts for food service operators.
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New York Mayor Michael Bloomberg has proposed a ban on the sale of large sodas and other sugary drinks in restaurants, delis and movie theaters in the hopes of combating obesity. Under his plan, sugary drinks would be limited to 16 fluid ounces -- almost half a liter.New York City Mayor Michael R. Bloomberg sent shockwaves throughout the restaurant industry last week when he proposed a first-in-the-nation ban on super-sized soft drinks.
The Bloomberg proposal, which would apply to soda sales in restaurants and entertainment venues in New York City, would prohibit the merchandising of any sweetened soft drink portion larger than 16 fluid ounces. Diet sodas, fruit juices, and dairy-based drinks would not be subject to the ban, which will most likely take effect later this year.
The business community's reaction to this regulatory effort, which Bloomberg is promoting as part of a larger war on obesity, was predictably hostile, with commentators lampooning His Honor for personifying the "Nanny State."
The beverage and restaurant industry is clearly worried, however, since New York City's previous initiatives to prohibit smoking and trans fats in restaurants eventually became commonplace regulations nationwide.
Apart from the freedom of choice issues the proposed ban raises, this regulatory effort will have major bottom-line impacts for food service operators.
Soft drinks, especially fountain beverages, are tremendously lucrative, often yielding a gross margin of 80 per cent or more. Bans on large soft drinks would thus likely necessitate price increases on other menu items in order to recoup the soda profits lost.
