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Why Coke and McDonald's balk at big-drink ban in Big Apple (+video)

Big Drink Ban: New York is a mega-market, but more importantly, the city sets the pace for other cities. Coke and other soft drink companies see trouble if the New York City big-drink ban spreads.

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Coca-Cola Co and McDonald's Corp slammed a proposed limit on soft drink sales in New York City that would turn a small McDonald's drink into the new large and could trigger a wave of similar restrictions aimed at curbing obesity.

"New Yorkers expect and deserve better than this. They can make their own choices about the beverages they purchase," Coca-Cola said in a statement on Thursday. Coke dominates the U.S. fountain drink market, and would likely be the most hurt.

On Wednesday, Bloomberg proposed amending the city's health code to ban the sale of soft drinks in cups larger than 16 ounces, a size equal to what McDonald's calls small. The chain's medium is 21 ounces, and its large is 32 ounces. Its kids' size is 12 ounces.

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"This raises the specter of this going to other cities as well," said Bernstein Research analyst Ali Dibadj. "These companies may have to start playing whack-a-mole if this gains momentum."

Heather Oldani, a spokeswoman for McDonald's, the world's biggest hamburger chain, said fighting obesity requires "a more collaborative and comprehensive approach".

"Public health issues cannot be effectively addressed through a narrowly focused and misguided ban," Oldani said. She declined to say how much of

McDonald's revenue comes from soft drinks, but Edward Jones analyst Jack Russo put it at around 5 percent.


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