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Starbucks balks at NYC sugary drink ban amid confusion over law’s enforcement

Holly Bailey, Yahoo News
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Full-sugar sodas would be limited to 16 ounces under new regulations. (Spencer Platt/Getty Images)

The coffee giant Starbucks says it won’t immediately comply with the ban on large sugary drinks set to go in effect next week in New York City, citing ongoing legal attempts to overturn the regulation and the company’s belief that most of its products are not subject to the ban.

The coffee chain’s announcement comes amid criticism from restaurants, bars, movie theaters, bodegas and others subject to the law. City officials haven’t fully explained how the regulation, set to go into effect March 12, will be enforced.

“We believe that the majority of our products fall outside of the ban given the ability of our customers to customize their beverage,” Starbucks said in a statement to Yahoo News. “As there is still ongoing litigation regarding the regulation, we’re not making any immediate changes at this time. We are evaluating which changes we may need to make to our recipes and product offerings and will be using this three-month evaluation period to make the appropriate changes for our customers and to fully comply with the new beverage restrictions.”

Championed by Mayor Michael Bloomberg as a way to fight the city's growing obesity epidemic, the new regulation limits the sale of sugary beverages including nondiet sodas, fruit drinks, sweetened teas and other high-calorie drinks to just 16 ounces. The ban does not cover drinks that are more than 50 percent milk—a rule Starbucks believes exempts its popular Frappuccino drink, which has been criticized by health advocates for its high sugar content.

Opponents of the law, including the American Beverage Association, National Association of Theatre Owners, the National Restaurant Association and other trade groups, have filed a lawsuit asking for it to be thrown out, in part because it creates an uneven playing field for businesses.

For example, while restaurants and delis regulated by the city Health Department are banned from selling large sugary drinks, a customer can still buy a 32-ounce Big Gulp at 7-Eleven because the store is regulated as a market by the state of New York, not by the city.

“You can walk down a single block and find one store that is allowed to sell large drinks and another store that’s not. It’s completely unfair,” says Chris Gindlesperger, a spokesman for the ABA, the soft drink industry’s main lobbying group.

Bloomberg has strongly rejected that criticism, although in a press conference last month he seemed to admit there were inconsistencies about how the law would affect some establishments. Asked if it was fair that 7-Eleven would still be able to sell the Big Gulp, Bloomberg suggested New York should adopt a statewide ban on large sugary drinks.

“The state should do exactly the same thing,” Bloomberg replied.

But New York Gov. Andrew Cuomo said he's not pursuing a ban. "It's not something that we are considering at this time," Cuomo said last week.

The ABA is backing New Yorkers for Beverage Choice, a coalition aimed at overturning the ban, which counts more than 3,000 New York bars and restaurants as members. The group’s lawsuit is supported by the New York chapter of the NAACP, which has suggested the soda regulation would unfairly affect minority-owned businesses in Manhattan and surrounding boroughs.

The lawsuit also argues the regulation is invalid, because it was not approved by the New York City Council. Instead, it was passed into law by the city’s Health Department, with a push from Bloomberg.

It’s unclear whether the regulation would have been approved if it had been presented to the City Council. Several lawmakers, including Council Speaker Christine Quinn, who is looking to succeed Bloomberg in the mayor’s office, have said they are opposed to the ban.

But even as opponents of the law continue to press forward with a lawsuit aiming to stop the ban from going into effect, some businesses have started to pre-emptively warn their customers of changes in their menu.

Earlier this week, Dunkin' Donuts began displaying signs in some locations telling customers they will now be responsible for adding cream and sugar to their own drinks. Other beverages, like iced coffees, would be sold only in small and medium size, the chain announced.

The pretzel chain Auntie Anne’s, which lobbied heavily against the ban, also began alerting customers that only diet sodas and other nonsugar drinks would be available in large sizes. A spokeswoman said some franchisees were weighing the possibility of replacing 20-ounce bottled drinks with 16-ounce alternatives that beverage giants including Coca-Cola recently started manufacturing for the New York market in order to comply with the ban.

A spokeswoman for McDonald’s restaurants told Yahoo News its locations will comply with the law by selling only 16-ounce fountain sizes of sugary drinks beginning next week.

Last month, the city Health Department sent a memo to the restaurants, bars and delis it regulates urging businesses to be in compliance by March 12. But officials also announced a brief reprieve, saying those found to be breaking the rules would simply get off with a warning for the first three months of enforcement. Starting in June, businesses found to be breaking the law will face a minimum $200 fine.

But some bars and eateries subject to the regulation say they are confused about how the city will enforce the regulation and how it would specifically affect their menus. For example, a bar is limited to serving just a 16-ounce coke to its customers. But do mixed drinks, like rum and Coke, come under that same restriction?

“There’s a lot of confusion about how strictly the city is going to implement the law,” said Lauren Menache, a spokeswoman for the 40/40 Club and Zengo, two restaurants that have pressed city officials to clarify the rules.

Zengo, which is owned by chef Richard Sandoval, had planned to launch a new bottle service for its customers this spring. But the restaurant has dialed back those plans amid questions about how the regulation might affect customers’ abilities to also order a carafe of mixer—like cranberry juice— to complement a bottle of alcohol.

Menache said the restaurant had repeatedly reached out to city officials for an explanation of the new rules, but had gotten little response.

“People are really scrambling to figure out how to comply with the law, to figure out what changes [need] to be made to make sure that we’re following the law,” she said.

Health Department officials haven’t offered much clarification on how they will enforce the ban. Asked by Yahoo News about criticism the city has been unresponsive to complaints that the regulations are unclear, Diane Hepps, a Health Department spokeswoman, said no one would be able to comment.

Hepps also did not respond to questions about how the ban will be enforced and instead offered a blanket comment.

“We hope that the sugary drink size limit will help reacquaint New Yorkers with more human-sized portions. Portion sizes of sugary drinks have grown and studies show people consume more when given larger portions, often without even realizing it. We hope this rule will decrease the consumption of sugary drinks which have been linked to obesity and diabetes,” she wrote in an email.

Managers at several New York movie theaters declined to comment about how they would implement the ban amid the still-pending litigation. But a manager of one Brooklyn theater who declined to be named said his location was considering the idea of allowing customers to buy two smaller-size drinks at a discount or offering cheaper refills.

“We are in a bit of a holding pattern to see what everyone else will do,” the manager said.

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