Back to main

Investors were Unfazed by NYC Soda Ban

Posted
3/12/2013 11:45:00 AM
By: Wyatt Investment Research
Referenced Stocks:DPS;KO;PEP

New York Mayor Michael Bloomberg's efforts to impose a citywide soda ban went for naught. A state judge blocked the controversial rule on Monday, a day before it was supposed to take effect.

Not that the ban in America's largest city had soda investors shaking in their boots, exactly.

Coke ( KO ) shares have risen nearly 5% in the last month, while Pepsi ( PEP ) is up 6.5%.  

Dr. Pepper Snapple Group ( DPS ) is up 3.4% since February 13, and a half a percent in the last week.

It makes sense that the proposed soda ban didn't have much of an impact on those stocks. For starters, Mayor Bloomberg's proposal wasn't a full "ban". It would only have limited the sale of sugary drinks larger than 16 ounces.

Also, even though the ban would have affected the largest city in America…it was still just one city. That said, the soda industry just dodged a big bullet.

If the ban had gone through and succeeded in its intended mission - reducing the city's growing obesity problem - other U.S. cities would likely have followed suit. Obesity, after all, is a national epidemic.

So the soda industry is likely taking a collective sigh of relief after Supreme Court Justice Milton Tingling overruled soda ban. Even if their investors weren't worried.