CONSISTENTLY DELIVERS

Jun 11, 2012

Too Big to Serve? Mayor Bloomberg's Soda-Restrictions Are Merely the Tip of the Iceberg

Companies with an interest in the manufacturing, distribution or retailing of food and beverage products are rightfully concerned about New York City Mayor Bloomberg's proposal to use the city's unelected Board of Health to prohibit any entity under its purview from selling a sugar-sweetened beverage in any container larger than 16 ounces.

While Bloomberg's proposal may be the most obvious recent development, it is not the most ominous. Like an iceberg, there is far more business and reputational risk, and legal uncertainty, lurking beneath the surface.

Last Thursday, Mayor Nutter of Philadelphia gave the keynote address to “The Sugary Drink Summit” where he recalled the 1964 landmark study by the U.S. surgeon general — “Smoking and Health” — which outlined the health risks associated with tobacco use. That surgeon general's report became the foundation for the mandated labeling of tobacco products. Nutter called upon the Obama administration for “the same kind of report on sugar-sweetened beverages as the surgeon general and the CDC has undertook [sic] on tobacco — a comprehensive study of what effects sugary drinks have on the body.” At the same summit, U.S. Senator Frank Lautenberg announced that he will try to attach an amendment to the pending farm bill, to have the federal government study whether drink bans could improve national health. It is noteworthy that Senator Lautenberg was a leading force behind the original movement to regulate, tax and otherwise restrict tobacco domestically and internationally. He spearheaded work with public health advocates and non-governmental organizations around the world.

Mayor Nutter will soon become chairman of the United States Conference of Mayors at the mayors' annual convention, attended by several hundred mayors and their key staff members. As chairman, it is presumed Nutter will continue to aggressively advocate that all levels of government should “create and promote policies that encourage citizens to make conscious and well-informed decisions about the health impact of what they are buying.”

At the same convention, the Institute of Medicine will report on “The Role of Cities in Fighting Obesity.” The institute is a primary force behind HBO's “The Weight of the Nation.” The report will likely encourage mayors to adopt Bloomberg-like restrictions or to explicitly ban the sale of “unhealthy” products on city property, as Mayor Menino did in Boston. Additionally, the institute may renew its call for substantial taxes on “unhealthy” products and the use of local zoning authority to control the mix of and even price at which retailers offer “healthy” and “unhealthy” products to consumers, such as kids' meals in fast service restaurants.

Subsequently, the Centers for Disease Control will present a report entitled “Partnering for Healthier Communities,” which will likely reiterate their call for “unhealthy” products to be labeled with “clear warning labels/designs that reduce positive mental imagery.”

Later this summer the National Association of County Officials, the National Conference of State Legislatures, National Association of Attorneys General and the National Governors Association will meet and likely receive similar presentations.

The question is not if, but where and when these activities will lead to new local, state and even federal governmental efforts to explicitly discriminate against one product over another in the name of preventing consumers from making “unhealthy” choices. In the coming months we anticipate state-, county- and city-level proposals to tax products containing “unhealthy” ingredients such as sugar or trans-fat, restrict availability of products through outright prohibition of sales and zoning restrictions and require labels disclosing certain products and ingredients deemed “unhealthy” by a governmental body.

It may be appropriate to increase your organization's awareness of these circumstances and consider the appropriate issue management strategy, including appropriate legal, government relations and public affairs components. This may be particularly appropriate for those with significant consumer-facing brands.

While these waters may be treacherous, they can be navigated. McGuireWoods LLP and McGuireWoods Consulting LLC are available to assist you with charting your organization's path through this dynamic and unfavorable policymaking environment. McGuireWoods Consulting is experienced at designing and deploying grassroots efforts that either outright oppose these types of governmental proposals or shape the outcome to accommodate the concerns our clients' efforts have elevated. These efforts typically engage employees, suppliers, customers, community leaders and the media. Our team is also available to work with those who seek to inject a contrary point of view into these national meetings of policymakers.

On the legal front, McGuireWoods LLP is well suited to help you comply and, if necessary, challenge regulations restricting the sale and marketing of consumer products. The firm's interdisciplinary food and beverage industry team has experienced attorneys in a variety of legal disciplines working across the country. Two of these lawyers literally “wrote the book” — “Food Safety Law,” published in 2010 by American Lawyers Media — and stand by ready to assist you as you confront these many new challenges.

This alert was authored by Eric A. Lundberg, McGuireWoods Consulting LLC, and James F. Neale, McGuireWoods LLP.