NYC Judge Told Big-Soda Ban Is Unfair to Small Business

Industry groups including the American Beverage Association asked a judge to strike down New York’s proposed ban on the sale of large servings of soda, calling it an unfair burden on small businesses.

To fight obesity, the city’s Board of Health in September approved Mayor Michael Bloomberg’s plan to limit the size of sugary soft drinks sold in restaurants, movie theaters, stadiums and arenas to no more than 16 ounces (473 milliliters) a cup. The following month, the beverage, restaurant and theater groups filed a petition in state court to block enforcement of the law.

The measure doesn’t apply to convenience stores and groceries that don’t act primarily as purveyors of prepared foods, which are regulated by New York State. The rules, which the city defends as a public-health matter, allow people to buy as many of the smaller drinks as they want and to get refills.

The ban is “grossly unfair” to small businesses such as pizzerias and hot-dog vendors because it lets larger chains sell the otherwise-prohibited soda sizes, James Brandt of Latham & Watkins LLP, an attorney representing the industry groups, told Justice Milton Tingling today at a hearing in New York State Supreme Court in Manhattan.

No Effect

“It’s not going to stop anybody from drinking soda, your honor,” Brandt said. “It’s going to push people from the Sabrett guy to the Duane Reade or the 7-11.”

Other groups that challenged the ban include the National Restaurant Association, the National Association of Theatre Owners of New York State, the New York Statewide Coalition of Hispanic Chambers of Commerce and the Korean-American Grocers Association of New York.

Attorneys for the city argued the rule is meant to help stem an epidemic of obesity being driven by sugary beverages. Consumption of those drinks is rising because food establishments sell ever-larger portions, they said.

The city charter gives the Board of Health the power to respond to public health matters such as obesity, said Thomas Merrill, general counsel for the New York City Department of Health and Mental Hygiene.

“The rule is rational, the rule is reasonable,” Merrill said.

The plaintiffs plan to ask Tingling for a stay of enforcement of the law, which is scheduled to begin in March, Brandt said. The judge didn’t indicate when he will rule on the industry associations’ request to strike down the ban.

The mayor is the majority owner of Bloomberg LP, the parent of Bloomberg News.

The case is New York Statewide Coalition of Hispanic Chambers of Commerce v. New York City Department of Health and Mental Hygiene, 653584-2012, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York at cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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