According to the Associated Press, the health department of New
York City (NYC) has proposed to limit the consumption of beverages
like Coke, Dr Pepper and Pepsi in restaurants, movie theaters and
other public places in order to address the growing concern of
obesity in the city of New York.
The move has negatively impacted soda-makers like
The Coca-Cola Company
Dr. Pepper Snapple Group, Inc.
As per the Associated Press, the proposed ban by the New York
Health Department would apply only to sweetened drinks over 16
ounces that contain more than 25 calories per 8 ounces. This would
seriously impact Coca-Cola, as a 12-ounce can of Coke has about 140
calories. However, this would not affect diet soda and any drink
that contains at least 70% juice, or half milk or milk
The source also stated that any business in the city will have
to pay $200 per inspection for not following the rules. However,
the proposal requires the approval of the city's Board of Health.
Once approved, it would push the U.S. government to adopt similar
In order to sustain in U.S. markets, beverage companies have
introduced smaller packs which have less calorie-content. Pepsi
introduced Pepsi Next early in 2012, which has about 60 calories
than the regular ones which have 140 calories, whereas Dr Pepper
launched "Dr Pepper Ten" last year, which has just 10 calories.
Coca-Cola had introduced a 7.5-ounce "mini-can" in 2009 and is
also expected to roll-out its mid-calorie versions of Fanta and
Sprite in selected cities over the near term. Moreover, the
companies have started printing the total caloric content on the
front of its beverages, in order to make consumers aware of their
Coca-Cola and its peers have been struggling in recent years as
people in U.S. have increasingly become health-cautious and are
shifting away from high-calorie soda beverages to bottled water and
juice-based drinks. We therefore expect the beverage makers to look
for opportunities in the emerging markets to remain profitable over
the long term.
DR PEPPER SNAPL (DPS): Free Stock Analysis
COCA COLA CO (KO): Free Stock Analysis Report
PEPSICO INC (PEP): Free Stock Analysis Report
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