Coca-Cola’s Sneaky, Evil Politics: How Big Soda Twisted Race and Used the Koch Brothers to Fight a Tax
Obesity researchers then were eying sugary drinks with great suspicion. For decades, dietary guidelines had told Americans to cut back on fat. When it came to weight gain, most experts thought, a calorie is a calorie, no matter the source. Because fat has more than twice as many calories per gram as carbohydrates or protein, people should avoid fat. Then in the 1990s, some nutrition experts—watching obesity rates surge despite that advice—started rethinking carbohydrates.
Some scientists argued that eating carbs floods the bloodstream with sugar, which triggers a sharp release in the hormone insulin. Insulin brings blood sugar down and also tells the body’s cells to store fat rather than burning it. After a carb-led surge in blood sugar, the scientists argued, the outpouring of insulin is so great that within about two hours the blood sugar level crashes down to below normal. That low blood sugar makes people feel hungry, prompting them to eat more. By this line of thinking, a calorie wasn’t just a calorie.
At around the same time, Dr. Robert Lustig was arguing that sugar is not just another carbohydrate but is uniquely bad—he called it toxic. When the fructose in sugar hits the liver, he said, it sets off a hormonal chain reaction causing chronically high insulin levels that, over years, lead to obesity and diabetes.
Yet another group of researchers was showing that calories in beverages are not nearly as filling as calories in food. In one study, when people ate calories in food they compensated by eating less later in the day, but when they drank their calories they actually ate more food later.
In the end, it didn’t matter much to the health department whether soda leads to weight gain because it delivers unnecessary calories, or because those calories come from carbohydrates, or because those carbohydrates are sugar, or because the sugar is in liquid form. Sugary drinks make people fat.
And that mattered very much, because Americans were guzzling sugary drinks. Over the previous quarter century, per capita sugary drink consumption in the United States had more than doubled, in parallel with the rise in obesity. In 2000, the average teenager drank 300 calories (24 ounces) of sugary drinks a day, and many teens drank twice that. With consumption levels like that, sugary drinks – while not accounting for the entire epidemic – appeared to be the single most important culprit.
Those massive consumption levels also were the biggest obstacle we faced in solving the problem. The non-alcoholic beverage industry takes in about $50 billion a year in the U.S. alone, mostly from full-sugar drinks. Coke, Pepsi, and the other soda companies wouldn’t give up that money without a fight.
In June 2008, as Mayor Bloomberg neared the end of his second term, Frieden pitched the idea of a soda tax. Sitting at a round mahogany table in a conference room in the 1800’s-era City Hall, he put up a slide showing the state’s projected $8 billion budget gap. “New York State is broke,” he said. “This is a good thing for us.” Much of that deficit came from soaring Medicaid costs, especially for illnesses related to obesity. Aside from the human suffering that obesity caused—700,000 New Yorkers with diabetes, 2,900 of whom needed amputations and 1,700 of whom died from the condition annually—the epidemic, Frieden explained, was costing city residents more than $4.5 billion a year in medical care. A tax on soda would encourage people to drink less. It would cut rates of obesity and diabetes, and over time, save lives. And it was a tax that no one would be forced to pay because everyone could buy unsweetened beverages or drink water for free.
It wasn’t a difficult sell. The businessman in Bloomberg understood economics and was proud that New York City’s cigarette tax was cutting smoking rates. He was deeply worried about the obesity epidemic and was eager to take it on. Getting a soda tax through the state legislature would be very tough, but he was willing to try.
By the end of 2008, New York State’s plunging tax revenues from the Wall Street crash had ballooned the state’s projected deficit to $15.4 billion, creating the largest budget crisis in the state’s history. On December 17 Governor David Paterson, telling legislators “we’re going to take some extreme measures,” proposed $9 billion in spending cuts, including big whacks in education and a $1 billion cut in payments to hospitals, nursing homes and other medical providers. He also proposed 137 new taxes and fees, one of which he called an “obesity tax”—an 18 percent sales tax on sugary drinks. It was Frieden’s tax, only reworked by the state’s budgeteers, and it caught everyone, including the soda companies, by surprise.
Then almost as suddenly he launched the idea, Paterson – who was appointed Governor after Eliot Spitzer abruptly resigned in a prostitution scandal and who appeared overwhelmed by the job – seemed to shoot it down. At a town hall meeting with college students, Paterson told the “soda addicts” not to worry. “The tax on soda was really a public policy argument,” he said. “In other words, it’s not something that we necessarily thought we would get.” His spokesperson tried to backpedal, saying that “the governor stands firmly behind his soda tax proposal,” but the damage was done. In budget negotiations with legislators opposed to the tax, Paterson quickly abandoned it. We had lost round one.
By mid-2009 Bloomberg was running for a third term, Frieden had become the Director for the Centers for Disease Control and Prevention, and I had followed him as New York City’s Health Commissioner.
In Bloomberg’s first two terms, the health department had sharply cut smoking rates with a combination of an indoor smoking ban, cigarette taxes, and tough anti-smoking “counter-advertising” on television. It was a tempting model. As we thought about a second run at a soda tax, we decided to try some counter-ads against sugary drinks.
We faced a problem with deep roots. Like cigarettes, soda isn’t just sold—it’s marketed. Its brilliant advertising, about $1 billion a year in Coke polar bears and Pepsi pop stars, overwhelms our televisions, sports stadiums, movie theaters, delis, bodegas, pizza joints, and snack counters. Coke and Pepsi reinforce those powerful ads by inserting their sodas into movies and TV shows and by sponsoring museums, parks, sports teams, and the Olympics. The marketing has welded an intense emotional attachment to the Coke and Pepsi brands. To tell New Yorkers that Coke and Pepsi meant blubber and diabetes would provoke ugly emotions.
Jeffrey Escoffier, the health department’s media head, ordered up some anti-sugary-drink ads from Jose Bandujo, who ran an advertising agency on contract with the department. “Don’t worry if it’s tasteful or anything,” he later remembered telling Bandujo. “Just do whatever you can so that it’s strong and a hard-hitting thing on soda.” Then Escoffier showed them to focus groups of soda drinkers, some of whom were overweight.
The problem we faced showed up immediately. In the warm-up, the participants commented that they didn’t think of sugary drinks as healthy, but they didn’t see them as truly unhealthy either. “Anything in moderation is okay,” said one woman. Yeah, said another, drinking one or two sodas a day wasn’t a problem. In fact, an additional one or two sodas every day might be enough to drive the entire obesity epidemic.
The moderator passed around several sets of ads, face down, then asked the participants to turn them over one set a time. One pair of ads made our problem even clearer. The images showed morbidly obese men in stained T-shirts, guzzling soda from 2-liter bottles, and the text said that soda “just dumps sugar and calories into your system. This can lead to obesity, high blood pressure, and diabetes.” The participants refused to believe it. Bandujo remembered, “Immediately people said, ‘He didn’t get that fat from just soda. He got fat from McDonald’s. He got fat from fast food. He got fat from other stuff.’”
Other ads mocked soda brands, with labels like “Dr. Diabetes” and “Mountain Don’t.” The participants were offended on behalf of the soda companies. “It was like we were talking bad about their mother,” said a health department staffer. “And they even got their legal hat on,” said Bandujo. “‘Oh, are you allowed to do that?’ Poor Mountain Dew!”
Another group of ads mixed a tough message with a touch of humor. A woman’s huge buttocks were labeled “Soda Can.” A guy’s gut (going after “sports drinks”) was branded “Sports Section.”
When a group of women turned over the pictures, there was a flutter of nervous laughter. “That’s what my stomach looks like.” “I’m like, wow, I could look like this.” “This is really offensive because it is real.”
One ad from this group showed a little girl’s fat stomach pushing out her bathing suit, with the label “Juice Container.” This one was too painful even to laugh at. “I felt sorry for her,” one man said sadly. “It’s cruel to show kids.”
We couldn’t run ads like those. Even if they worked, they would spark a firestorm among overweight New Yorkers and light up the tabloids.
Bandujo’s team had come up with another idea, one that went directly at people’s disbelief. “People could easily rationalize in their head that when you eat a cupcake, it turns to fat,” he said. “When you eat a hot dog, it turns to fat. . . . People weren’t thinking of a liquid turning into a solid—fat!” The ad just showed a can of soda being poured into a glass, but as the soda fell, it turned into yellowish globules of fat laced with thin red blood vessels. In big letters beneath, the ad asked, “Are you pouring on the pounds?”
Among women, the ad worked beautifully. One said, “I can’t even look at this.” Another said, “It has my stomach churning.” She thought she might vomit right then. Another said, “I would put it on my refrigerator” to remind her not to drink soda. But the men shrugged; to them, the fat globules weren’t disgusting enough. One man said helpfully, “Maybe if you showed somebody drinking it . . .”
Still, the focus group summary report read, “revulsion was the most effective approach.”
We posted three versions of the soda-turning-into-fat ads on the subways showing different beverages: a cola, a lime green sports drink, and an iced tea – each with the headline “Are you pouring on the pounds?”
But Jose Bandujo wasn’t finished. That focus group had given him an idea. He and a producer hired an acting student, sent colleagues to the grocery store to buy the “grossest stuff we could think of to make this yellowish orange-ish chunky concoction,” and turned on their video cameras. In the edited video, backed up by campy music, the actor pops open a can of soda to pour it into a glass, but what plops into the glass is globules of fat. Then the actor tips up the glass and gulps it down, the fat blobs overflowing onto his cheeks and sliding down his chin. Words drop onto the screen to the sounds of deep echoing booms: “Don’t drink yourself FAT.” Then, holding up the glass of fat as if to propose a toast, the young man turns to the camera, smiles, and gives a mischievous wink.
We had no money to run the ad on television, so we posted Man Drinking Fat on YouTube and sent out a press release. The ad incited a swarm of outraged “sharing.” In its first week online, Man Drinking Fat got nearly a half million views and a piece of Jay Leno’s monologue. With all the outrage, the ad was doing exactly what we wanted—getting people to talk about how sugary drinks make you fat.
In January 2010, Governor Paterson tried a soda tax again, alongside a dollar-per-pack increase in the state cigarette tax. His new proposal took Frieden’s idea intact: a 1-cent-per-ounce excise tax on sugary drinks, with the revenue paying for health care. The sugary drink distributors would pay the tax based on how many ounces they shipped. We assumed—from experience with cigarette taxes—that the distributors would pass the cost on to retailers, who would then raise the prices for sugary drinks at stores and restaurants. The tax would grow as the volume of soda grew, encouraging people to buy less. Channeling the tax revenue to health care would help get voters behind it. One poll found that while only 47 percent of voters supported an “obesity tax,” 76 percent supported “a tax on sugary soft drinks to balance the city budget.” In a second poll, 76 percent preferred a soda tax to cuts in health care.
This time we thought we had a good chance of winning. Pulling in the same direction were the governor, the mayor, the hospitals, the union of hospital workers, and a charged-up coalition of health organizations, including the American Heart Association, the American Cancer Society, and the American Diabetes Association. State health commissioner Richard Daines wrote op-eds, met with editorial boards, and barnstormed the state, haranguing anyone willing to listen about the soda tax’s “triple play”: better health, less need for treatment, more money for health care. The hospitals were among the biggest employers in the state, and their 1199 SEIU union supported political campaigns, so they both had clout. Together with the health advocacy coalition, they put in more than 7,000 phone calls to legislators, met with more than a hundred of them, held a rally with 250 health care workers at the capitol, and held symbolic “soda buy-back” events around the state. They also ran television ads that featured doctors and nutritionists talking about the damage obesity was causing in kids and the link to sugary drinks.
The soda companies fought back by bringing in the public relations company behind the “Harry and Louise” ad had that helped kill Bill Clinton’s health care reform plan. Under its new name Goddard Gunster, the agency today calls itself “the most sought-after guns for hire,” which is proud to be “among the first to apply aggressive political campaign strategies to issue advocacy efforts.” Its website explains its technique: “Through facts and research, we define the parameters of the public debate and align consumer, corporate, and government interests.”
The PR firm created an Astroturf group called New Yorkers Against Unfair Taxes and fired back with an ad campaign of its own. One ad featured a woman unloading groceries. “Making ends meet is a constant struggle for families like ours. . . . Instead of cutting out-of-control spending in Albany, [Governor Paterson would] tax families. . . . Tell Albany to trim their budget fat, and leave our grocery budgets alone.”
But the serious combat took place in back rooms. In New York State in 2009, the American Beverage Association had increased its donations to state legislators from nothing to $900,000, and the two soda companies increased their state lobbying spending to $3 million. That included $36,000 channeled to State Senator Jeff Klein, who then switched from being a soda tax supporter to one who was, according to an inside source for the Daily News, “instrumental in getting the soda tax off the table.”
In 2010, after Paterson’s second proposal, the companies went into higher gear. Coke and Pepsi sent workers to meet with the governor, telling him the tax would kill their jobs. They brought in the Teamsters, whose members drive soda delivery trucks, to pressure union-friendly legislators. The ABA opened its wallet further, spending nearly $13 million – more than lobbyists spent on any other issue.
The tax proposal went nowhere in the legislature. Coke and Pepsi had shown that they were stronger than a governor, a mayor, and the state’s health commissioners, hospitals, and most powerful union combined.
If any of the soda companies’ arguments against the tax had struck a chord with New Yorkers, it was that the government was just using the obesity epidemic to squeeze people for their money. And that made me think of a different angle.
It had to do with the Supplemental Nutrition Assistance Program – or SNAP, formerly Food Stamps. The program pays for groceries for low-income people, and by 2010 it reached 48 million people, or one in eight Americans, and paid for $65 billion in food a year.
Across the nation, SNAP funds bought mountains of unhealthy food, like candy, chips, snack cakes, and soda. No one outside of USDA knows how much the program spends each year for sugary drinks, but it is at least $1.7 billion and could be as high as $5 billion. The latter figure is nearly five times CDC’s budget to prevent chronic diseases. I thought that the government shouldn’t buy, and then hand out for free, the food that was the single biggest contributor to our nation’s number one nutritional problem—at all, but especially in a nutrition program.
In October 2010, Mayor Bloomberg and Governor Paterson held a press conference in the diabetes center of King County Hospital to announce that New York was submitting a request to the USDA for a two-year demonstration project that would exclude sugary drinks from the SNAP program in New York City. The rule change wouldn’t affect the size of the benefit. SNAP participants would get every penny of their monthly food allowance.
The idea wasn’t new or radical. When Congress started Food Stamps in 1964, the House version of the bill had excluded soda. Aside from SNAP, no federal nutrition program in 2008 included sugary drinks.
It wouldn’t have been a big change to the program. SNAP benefits are not cash. You can’t use them to buy cigarettes, beer, pet food, paper towels, or prepared food (including deli sandwiches). Our proposal would just add one more item to the excluded list.
And it wouldn’t have been a big change for people enrolled in SNAP. For most people, the average SNAP benefit of $133 per person each month was too little to cover the entire grocery bill. SNAP is a supplement. Families enrolled in SNAP used their own money after their monthly benefits ran out and to buy excluded items. If SNAP participants wanted to buy soda (instead of drinking water for free), they could spend their own money for it. And then they could use the SNAP benefits they saved by not buying soda to purchase healthier foods.
The SNAP proposal stirred up the press, roused opinion writers, and scrambled the usual political lineup. Most people viewed our other ideas as liberal, but Republicans and conservatives tended to like the SNAP proposal, and Democrats and liberals generally didn’t. At the same time Bill de Blasio then the city’s Public Advocate, endorsed it.
But the proposal enraged the soda companies. The day after our announcement, Coca-Cola CEO Muhtar Kent sent a letter to Bloomberg, calling the idea “unjustified and discriminatory.” PepsiCo CEO Indra Nooyi, writing the same day, was more threatening. “When we met earlier this summer,” her letter said, “we let you know that as we restructure our business, we are redoubling our commitment to retain and increase our investment in New York City and New York State. But apparently commitment and loyalty is a one-way street in New York. Since our meeting, attacks on our business by the City of New York have gone unabated. . . . I am particularly concerned that you have chose [sic] to focus on just one category, and assault it across the board. I am sincerely hoping we can meet and talk about how we can work together.”
Days later the grocery stores complained to the USDA: the Food Industry Alliance of New York State wrote that “no food inherently is bad within the context of a balanced diet. . . . Yet, by government imposing its directive into food choices . . . SNAP shoppers will be deprived of nutritional decisions heretofore left to their discretion.” The stores also argued that people might travel to the suburbs just to buy soda with SNAP.
The public face of the opposition, though, was not the soda companies or the grocery stores. It was “antihunger” organizations that ran food banks and advocated for SNAP. The same day the grocery store letter hit the USDA, the widely quoted antihunger activist Joel Berg sent the agency his own fiery eight-page letter. Under screaming heads like “The proposal would punish low-income people for the supposed crime of being poor,” he wrote that our proposal “violates the law, restricts freedom, and criminalizes hunger by eliminating the ability of low-income SNAP recipients to even occasionally obtain sugar-sweetened beverages.”
The antihunger activists were cozy with the big food companies. Feeding America, a national network of two hundred food banks, has a board with members from ConAgra, General Mills, Mars, Kroger, Walmart, and Nationwide Agribusiness. And they looked well connected to the soda companies too; the spokesman for the American Beverage Association told the New York Times, “Fighting hunger is a pretty heavy lift. I think we need all the hands we can get working on that cause. I don’t see a conflict here.” The antihunger groups didn’t seem ashamed about doing the bidding of the big food corporations. Edward Cooney, executive director of the Congressional Hunger Center, told the Times, “We are in a coalition with major food companies for one reason only; that is, access to power.”
Meanwhile, I heard from New York City’s Washington office that as soon as we announced our idea, the American Beverage Association was lobbying black and Hispanic members of Congress against it. And in April 2011, eighteen members of the Congressional Black Caucus, including the ranking Democratic member of the House subcommittee overseeing the USDA, sent a letter to USDA secretary Thomas Vilsack attacking the proposal.
Ten months after we submitted our proposal, the USDA turned us down. The department didn’t argue that the federal government ought to buy sugary drinks for people. Instead, the agency only complained vaguely about the proposal’s details: the “scale and scope” were too large and complex, there were “a number of unresolved operational challenges and complexities,” and “the proposed evaluation design is not adequate.”
I pressed the health department staff for more ideas. Lynn Silver, the Assistant Commissioner for Chronic Disease Prevention, came back with the problem of ballooning portion sizes.
In the early 2000s, researchers were churning out studies highlighting an unnerving fact of human nature: when people are served bigger portions, they just eat more. Nutrition researcher Barbara Rolls had invited 51 men and women into her laboratory for lunch on four different days, offering them different (but all more than ample) portions of Kraft macaroni and cheese. When she served her volunteers a large portion, they ate 160 more calories than when she served them the smaller portion, without feeling any more full. “Most people are unaware of what constitutes an appropriate portion size,” Dr. Rolls wrote. “Thus, the ready availability of foods in large portions is likely to be facilitating the overconsumption of energy in many persons.” In separate studies, she found the same portion-size effect with deli sandwiches, bags of potato chips, fruits and vegetables, and soda.
Restaurants didn’t publish studies like these, but the cancerous growth of portion sizes showed that they understood the principle. When McDonald’s opened in the 1950s, the only size cup on the menu was 7 ounces. By 2010 a “medium” drink at McDonald’s had tripled to 21 ounces. And McDonald’s was responsible compared to KFC, which sold sodas in half-gallon tubs delivering 54 packets of sugar.
In theory, the solution was easy: give people soda in portions more appropriate to human needs. Even if they can choose seconds, they usually won’t.
But the details became messy. The sugary drink portion cap would apply to drinks with added caloric sweetener that delivered more than 25 calories in 8 ounces. That would allow unlimited portions of pure fruit juices (which had nutritional value and were rarely sold in huge portions) and some new teas that had just a hint of sweetener. We set the limit at 16 ounces, which was a common size and which was more than enough for one person.
What about drinks made of milk? McDonald’s had milk shakes, and Starbucks had “Frappuccinos” that walloped consumers with calories. But our health department encouraged people to drink more milk for the calcium and vitamin D. Milk-based drinks made up less than 3 percent of the drinks that people ordered at chain restaurants—too small a fraction to be very important. We should draw it where the studies on obesity were pointing to, I thought. Those studies focused on soda and fruit-flavored drinks—essentially sugar water—not on milk-based drinks. That meant we would allow big milk shakes.
The 16-ounce cap would apply in all “food service establishments” that had permits from the health department: the city’s 24,000 restaurants, cafeterias, and snack counters (including those at baseball stadiums and movie theaters), as well as outdoor food carts and food trucks. Those were the businesses that we regulated, that our sanitarians inspected, and that were covered by the city health code. Those were the businesses that we required to followed our trans fat ban. Grocery stores, on the other hand, were regulated by New York State, which preempts the city Board of Health. For the most part, that distinction fit well with a portion limit. Restaurants sold soda for one person to drink at one meal. Grocery stores sold soda in 2- and 3-liter bottles, but those bottles were to take home, share, and drink over time. Unfortunately, some stores licensed as groceries—like convenience stores—also sold “grab and go” bottles that people drank immediately. Our rule would not stop them from selling bottles larger than 16 ounces, and when a convenience store was next door to a restaurant, that looked inconsistent.
Although the rule applied to every restaurant, the impact was almost entirely on chains like McDonald’s and Subway, where most drinks sold were bigger than 16 ounces. A small fraction of the independent restaurants sold drinks larger than that, and those were mostly delis that sold 20-ounce bottles but also carried 12-ounce cans. The “small business” independents would barely notice the rule.
Later, I made the case to Mayor Bloomberg in City Hall. Under the watchful eyes of the 1800s-era New York State governors whose portraits hung on the walls, I went through the research on portion size. I also showed him a 1950s-era ad that shows a woman pouring Coke from a tall bottle at a table with three place settings. “Serves 3 over ice—nice!,” the caption read. “Big 16 oz size.” A short time ago, I argued, Coke advertised a 16-ounce bottle as big enough for a family of three, so how could it be wrong to limit single portions to that size?
Bloomberg immediately thought about it from the restaurants’ point of view. They should just shrink their drinks to 16 ounces and charge the same amount, he said. Could restaurants offer a buy-one-get-one-free in 16-ounce cups? They could, I said, and the rule would still work.
I could see that he was seriously considering the idea. I thought I owed him a warning. “This will be controversial,” I offered. He laughed. “Oh, you figured that out?”
When the story hit, we arranged for photographers a display of stacks of sugar cubes in front of soda cups ranging from 7 to 64 ounces. Even the stack of nine sugar cubes in front of the seven-ounce cup was impressive. The pyramid in front of the 64-ounce cup from KFC was a stunning 12 rows high and contained 87 sugar cubes.
The New York Times headline was “New York plans to ban sale of big sizes of sugary drinks.” The Post called the rule a “limit,” and the Journal a “restriction,” but after the Times used the word ban, the terrible label stuck. The story lit up the national press as if we were actually proposing to ban soda.
We had caught the soda companies off guard, but after a pause they hit back hard. Their PR firm created a new front group called New Yorkers for Beverage Choices, which put billboards on the backs of soda delivery trucks, with an athletic figure in silhouette defiantly raising a large cup, next to the words “Don’t let bureaucrats tell you what size beverage to buy.” They ran radio spots with “Noo Yawk”–accented actors saying “This is about protecting our freedom of choice,” and video ads asking “Are we gonna let the mayor tell us what size beverage to buy? If we let ’em get away with this, where will it end?” They flew banners attacking the rule from airplanes over Coney Island.
They mailed letters to hundreds of thousands of New Yorkers, asking them to sign and return enclosed cards opposing our rule. They organized a “Million Big Gulp March” on City Hall steps, attended by some fifty people, many wearing matching T-shirts saying “I picked out my beverage all by myself.” There, under a banner showing a Statue of Liberty–like figure, City Council members and a Teamsters leader rallied the group with words like tyranny and freedom.
Five days after the story broke, I testified to City Council at what was supposed to be a routine budget hearing and was pummeled by council members. One complained about the portion rule’s “arbitrariness” because we hadn’t regulated the sizes of candy bars or beer. Another called the “piecemeal” policy “insulting to our intelligence” because it didn’t address French fries and hamburgers. A third member, sitting behind a large soda cup, called the rule unfair because “90 percent” of the parents who go to movie theaters buy one large sugary drink and share it to “feed their families” while saving costs. After the hearing, as the council members filed out, they were warmly greeted by the lobbyist for Coca-Cola.
When we tried to rally supporters, we saw how deeply embedded the soda companies are in our society. One obesity researcher turned us down because she believed her endorsement might jeopardize her ability to get grants. The head of a health insurance company, which would benefit financially if people stayed healthy, told me that he couldn’t support the portion rule because he would “catch hell” from his clients, the bottling companies.
The day before the Board of Health was to hold its first meeting on the proposal, Coca-Cola CEO Muhtar Kent had asked Bloomberg to meet. Three days later he flew to New York City with Steven Cahillane, the CEO of Coca-Cola Refreshments, its North American bottling company, and two others. Deputy Mayors Howard Wolfson, Linda Gibbs, and I joined the mayor to meet them at the dining room table at Gracie Mansion, over a linen tablecloth and cans of Coke Zero.
Kent, the son of a Turkish consul-general who was born in New York City, has a broad chest, impeccable grooming, an accent that reflects his British education, and a big winning smile. After chatting for ten minutes with Bloomberg about the depression and the teetering financial system in Europe, he made his case. “We are a marketing company and a hydration company,” he said. “We are not perfect,” but his company was trying to do its part to solve the obesity problem. It was “not an accident” that sales of diet beverages had risen to 30 percent of the market. Now, though, our rule was killing them. He had just come from Europe, where everyone was saying, “‘I hear Mayor Bloomberg is banning your product in New York City.’ Even though we know that’s not exactly what you are proposing, that is the perception.” To have this iconic product, the global symbol of America, banned by the city that is the symbol of America was ruining its image. Instead of fighting each other, we should work together, he said. We could accomplish so much more if we did—Coke with its ability to influence the consumer and Mayor Bloomberg with his global reputation in health.
Cahillane, the son of a New York firefighter with roots in Ireland, had a thin face, sandy hair, and a directness about him. He was a manager who had worked his way up through the beer business. Coke had done a pilot project in the Bronx, he said, that had led to a 10 percent increase in the sales of diet beverages and a 2.5 percent decrease in the sales of full-calorie sodas. That showed what they could do.
Kent proposed to take the Bronx pilot project citywide if we agreed to withdraw the rule for a year. It would have a greater impact on calorie consumption in New York City, he said, than our rule would. Dr. Farley could model the impact to verify that that was true, he said, opening his arms to show that he had nothing to hide. And he was sure that if we agreed, he could bring Pepsi along with the plan.
That set off some frantic negotiations. After spending some hours with spreadsheets, I was convinced that Coke’s proposal actually had the potential to cut sugary drink consumption substantially. But the Coke people knew so much more about the business than we did. I was worried that we could be hoodwinked.
I wrote my own balance sheet. On the plus side, Coke’s offer would affect more distribution channels than our policy, which affected restaurants only. The city might indeed see a health benefit, and the political pressure and the press noise would disappear.
But the minus side was long. Coke would have to get the other soda companies to agree. Coke hadn’t shown us any hard data from its Bronx pilot or offered any numbers to measure progress. We would be completely dependent on the corporation’s actions, with no way to verify what it was doing. In another eighteen months, we would be out of power; if Coke’s plan was going off track, we’d be helpless. Most of the changes the company proposed were ones that it was already making in response to public pressure on obesity—or should have been making.
In our final conversation, Cahillane warned that if we didn’t accept this offer, he would take it to another city, which would reap the benefits that New York City had declined. We turned him down anyway. He said Coke would fight the rule tooth and nail.
Coca-Cola made good on Cahillane’s threats. In October 2012, a month after the Board of Health passed the portion cap, the powerhouse law firm Latham & Watkins, working for the American Beverage Association, sued to block the rule. Their central claim was that the city Board of Health did not have the authority to pass the portion rule. The law firm channeled the public relations war into the courtroom, referring to the rule as “The Ban,” capitalized, and prominently citing the ninety-thousand-name petition and polls showing that a majority of New Yorkers opposed it.
Coca-Cola brought race in the argument too. The corporation’s longtime law firm King & Spalding delivered an amicus brief, signed by the NAACP and the Hispanic Federation. These organizations had “fought long and hard to protect and enliven the voices of their community members in the political system,” they wrote. But with the portion rule, the “Board of Health and unelected appointees, like Commissioner Farley, circumvented those voices, along with the voice of millions of New Yorkers, when the board told New Yorkers that it would selectively and unfairly harm small and minority-owned businesses.” The NAACP had deep ties to Coca-Cola and had recently received tens of thousands of dollars from Coke for a health education program. The former president of the Hispanic Federation had just taken a job at Coca-Cola.
Then in November, Cahillane stood with Chicago mayor Rahm Emanuel and officials from PepsiCo and Dr Pepper Snapple Group to announce that the soda companies were giving that city $5 million. The money would go for a wellness competition between city employees in Chicago and San Antonio. In return, Emanuel promised to kill a proposed sugary drink tax and not pursue a New York City–style portion cap. It was the first of three payoffs that Coke would make to Chicago over the next nine months. In the second, it gave the city $3 million for nutrition and exercise classes. In the third, Emanuel put images of Coke products on 50,000 blue household recycling carts bought with $2.6 million from the Coca-Cola Foundation.
The lawsuit landed on the desk of Judge Milton Tingling, a fifty-nine-year-old African American from the Washington Heights neighborhood. Tingling was known for his sympathy and patience, but his rulings signaled that he was deeply skeptical of government power.
On March 11, 2013, the day before the portion rule was to go into effect, Tingling slapped the City down hard. He agreed that the Board of Health did not have the authority to pass the rule, but he went far beyond that. The rule was “arbitrary and capricious,” he wrote, riddled with what he considered “loopholes” like free refills. And even more breathtaking: he claimed that the Board of Health had powers only to address “communicable, infectious, and pestilent diseases.”
We were horrified. The judge’s opinion, if it stood, would destroy the Board’s ability to protect New Yorkers from the most important health problems of our time. It meant the board could not have banned trans fat, required calorie labeling, or banned lead in paint. According to the health department’s General Counsel Tom Merrill, the ruling “would pretty much have invalidated most of the Department.”
The flood of news stories about the ruling took an angle that was different but nearly as bad. Tingling’s verdict was strictly about which body of government, the Board of Health or the City Council, had the authority to pass a portion limit, but his words were so harsh that they implied that a soda portion limit was somehow morally wrong.
Mayor Bloomberg came out defiant. Obesity was “a health crisis,” he said to reporters. “People are dying every day. . . . This is about real lives.” The city would win on appeal.
The case made its way to the state’s highest court in June 2014, after Bloomberg had been succeeded by Bill de Blasio as Mayor. This last round became a magnet for advocates and legal experts. Coming to the city’s side were professors of New York constitutional law, national public health advocates, and a group of New York City–based minority organizations. Joining the soda companies were thirty-two members of the City Council and the Washington Legal Foundation, a group funded by the Koch brothers.
After a courtroom scene in which the judges hammered both sides with questions and allowed them no time to answer, the justices voted 4 to 2 that the Board of Health had exceeded its authority. The four-judge majority had to go through logical contortions to get there, though. The board had inappropriately “legislated” because the portion rule required “choosing among competing policy goals,” they wrote. At the same time, they agreed that the board did have the authority to “balance costs and benefits” when writing rules. And the board had acted within its authority when it passed rules banning lead paint in residences, requiring chain restaurants to post calorie labels, and requiring landlords to install window guards to prevent falls by toddlers, because, they claimed, for these rules “the choices are not very difficult or complex.”
The remaining two judges penned a scornful dissent. “There is no question that the Portion Cap Rule falls comfortably within the broad delegation granted to the board by the legislature,” they wrote. “What petitioners have truly asked the courts to do is to strike down an unpopular regulation, not an illegal one.” The majority’s decision to strike down the rule was little more than “camouflage for enforcement of judicial preferences.”
It was our third loss over sugary drinks, losses that bared the political and legal might of the soda companies. Staff in the health department were crushed. But some took solace that in taking on soda the department had begun something important. “I think we fired a pretty big shot across their bow,” said Tom Merrill. “We got the country and everybody talking about it.” The constant barrage of press stories over the battles effectively became counter-advertisements that gave sugary drinks an increasingly sinister image.
And as the policy battles raged, in what mattered most, public health was winning. From 2007 to 2013, the fraction of adult New Yorkers saying that they drank sugary drinks daily fell by more than a third, from 36 to 23 percent – a drop of some 700,000 people. In the same period, we noticed that, after rising for decades, obesity rates in children in the City had reversed course and were edging down. And then in 2013 we were shocked to see the obesity rate in adult New Yorkers, after years of relentless rises, dropping by a half percentage point. Maybe it was a fluke, or maybe it was a true inflection point.
The fight over sugary drinks – health advocates versus the soda companies – is only growing. Obesity is now an epidemic around the world, with some countries rivaling the United States, and the battle has spread to them. Mexico is hit hard by obesity and has the world’s highest per capita sugary drink consumption. There, Mexican health advocates – with the financial support of the Bloomberg foundation and against the fierce resistance of the soda companies – sprinted a bill through the legislature with taxes on soda and junk food. An early evaluation showed sugary drink purchases falling 10 percent.
The victory in Mexico washed back to the United States. In the November 2014 elections, voters in Berkeley, California, passed a referendum for a 1-cent-per-ounce excise tax on soda by a three-to-one margin, despite the soda companies spending some $2.4 million—or $30 per voter—trying to block it. The Berkeley group won with a sophisticated political strategy that painted the soda companies as bad guys, even with their organization name: Berkeley vs. Big Soda. Bloomberg donated $650,000 to the campaign. After the win, Howard Wolfson told reporters, “We stand ready to assess and assist other local efforts in the coming election cycle.”
Adapted from Dr. Tom Farley’s “Saving Gotham: A Billionaire Mayor, Activist Doctors, and The Fight for Eight Million Lives,” published from W.W. Norton in October 2016. Reprinted with permission of the publisher. All rights reserved.