New York City mayor Michael Bloomberg was the first to propose a new regulation on the size of containers that high-calorie drinks, like sodas, could be sold in. But copycats abound, and now Cambridge, MA mayor Henrietta Davis has proposed a similar regulation in hopes of reducing the risk of diabetes and obesity.
The ban in New York City would limit the size of high-calorie beverages to a 16-ounce container, though consumers would still be able to order several rounds of their drink of choice, according to Associated Press. There is obvious pushback from vendors like 7-Eleven and soda companies, saying that the movement against high-calorie drinks should not be focused on stores since most consumers are adults. Instead, the focus should be on children in school, teaching them how to make healthy decisions.
Beverage companies like Coca Cola Company (KO), PepsiCo, Inc. (PEP), and Dr. Pepper Snapple Group, Inc. (DPS) are all planning public relations campaigns against the regulation proposals, according to Kapitall.
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If the ban/regulation is passed, soda companies will see a significant drop in sales in the U.S., since the proposals will likely continue to spread to other areas of the country.
Additionally, Corn Products International (INGR) could be hurt because they provide the high-fructose corn syrup to many beverage companies to make their sodas. With a large drop in demand for their product, they will likely see a drop in their revenues.
Use Kapitall tools to compare Corn Products with the soda companies mentioned above. Will they survive the regulation that will likely surround them?
Interactive Chart: Press Play to compare changes in market cap for KO, PEP and DPS:
Interactive Chart: Use the Turbo Chart to compare the stock performance of PEP and KO against the performance of the S&P 500 Index (SPX):
(Written by Danny Guttridge)