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For soda makers, restaurants facing NYC ban, size does matter

By Joseph Ax

NEW YORK (Reuters) - Soda makers and restaurants say they will face daunting logistical hurdles such as needing to retool manufacturing, change distribution systems and even introduce new plastic cups if New York's ban on large-size sweet drinks in food outlets survives a legal challenge.

The ban, the first of its kind in the nation, is due to take effect in March and would prohibit sugary soft drinks larger than 16 ounces (473 ml) from being sold in restaurants, movie theaters and food carts while still permitting their sale in stores that do not prepare food, such as convenience stores.

Last week lawyers for plaintiffs in the beverage and restaurant industries asked the judge overseeing the case, Manhattan Supreme Court Justice Shirley Kornreich, to move up oral arguments from January to an earlier date.

Some businesses will need as many as three months to "retool" their operations if forced to comply with the regulation, the lawyers said in a letter to Kornreich, who could rule on whether to move up arguments at any time.

The city is not opposing the request, in part because the plaintiffs have said they will seek an injunction to delay implementation of the law if the litigation is not finished quickly.

"It's simply in everyone's interest to get this resolved sooner rather than later," said Gabriel Taussig, a city attorney.

The ban presents a host of potential logistical challenges, from altering factory machinery to changing distribution systems, said Caroline Starke, a spokeswoman for the plaintiffs.

In some cases, like that of fast-food chain Subway, which offers fountain drinks in a 21-ounce (621-ml) size, businesses may be forced to manufacture entirely new sizes of plastic cups.

In other cases, like that of Honest Tea, products may not currently be available in certain sizes. For example, a 500-ml (16.9-oz) bottle of Honest Tea's Honey Green Tea is just a shade more than 16 ounces.

That extra 0.9 ounce could pose a major problem for Honest Tea and its parent company, The Coca-Cola Co., if the ban is upheld.

"What we're hoping to avoid is prolonged uncertainty for the affected businesses," Starke said.

Mayor Michael Bloomberg has promoted the ban as a way of reducing obesity among city residents. The beverage and restaurant industries have decried it as a restriction on personal freedom.

The lawsuit, filed in October, claims the Bloomberg-appointed health board overstepped its authority in passing the regulation without the city council's approval. It also argues the ban is arbitrary, since it only affects certain types of drinks and businesses.

(Editing by Daniel Trotta and Cynthia Osterman)

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