Nalebuff: Ban calories, not ounces, to regulate beverages

Various size cups and sugar cubes are displayed

Various size cups and sugar cubes are displayed at a news conference at New York's City Hall. (May 31, 2012) (Credit: AP)

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Call me a traitor to my class, or an honest man. Unlike most people in the beverage industry, I'm in favor of taxes or even a ban on supersweet drinks. But the proposed regulation in New York isn't the answer.

I fully agree with Mayor Michael Bloomberg (also the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News) that most drinks are too sweet and that we should do something about this. Indeed, I have. Fourteen years ago, I started Honest Tea Inc. with one of my students. The idea was to make tea that tastes like tea, not liquid candy. This year, the company will sell 100 million bottles of tea, ades and kids' pouches, all with fewer than 100 calories a package.

Here I was thinking I was part of the solution only to find that these drinks will be banned. Banned! Why? Because the products come in 16.9-ounce (500-milliliter) bottles and thus exceed the free pass for drinks at 16 ounces.


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Coca-Cola Co. bought Honest Tea more than a year ago, so I no longer have any financial interest or managerial role in the company. But I do have a keen interest in promoting logic along with delicious healthy beverages.

Here's what doesn't make sense to me: Why is it appropriate to sell a 16-ounce bottle of Snapple Sweet Tea with 240 calories or SoBe No Fear with 260 calories and 70 grams of sugar, but not a 16.9-ounce bottle of Honest Tea Honey Green Tea with 70 calories and 18 grams of sugar? The SoBe product has almost four times the sugar and calories, yet Honest Tea is the one being banned.

I'm a professor and that leads me to look for internal inconsistency in any rule. A 16-ounce version of Honest Tea with 70 calories would be fine. And water is fine in any quantity. Why can't a beverage just add 0.9 ounces of water and still be OK? My fundamental problem with the ban, which the city's Board of Health is scheduled to take up this week, is that it focuses on the wrong metric. Fluid ounces are good, not bad. People are told to drink eight 8-ounce glasses of water a day. Like many other people, I can't do it - water is too boring. Add a little flavor, a little caffeine and the antioxidants present in green tea, and count me in. The health issue is sugar and calories. We should look at the total calories in the bottle, not the number of fluid ounces.

My alternative proposal would be to limit or tax drinks with more than some total amount of calories from sugar. To be specific, let's define a permissible beverage as one with 140 or fewer calories in the whole bottle or can. That can be a 12- ounce can of soda or a supersized but lightly sweetened 48-ounce version of some Honest Tea flavors. So long as the calories from sugar are no more than 140, the product can be sold no matter the size. If the product has more sugar than that, it falls under the ban or would be subject to a tax.

Some might argue that counting calories is harder than counting ounces. For any prepackaged bottle or can, one task is no harder than the other. Both are printed on the label. Indeed, a tax or ban on excessive sugar would encourage manufacturers to make their products a bit less sweet so as to be permitted (or pay less tax). That might have an even bigger effect on public health than reducing packaging size.

Things get more complicated at soda fountains where different drinks have different sugar levels. A 12-ounce cup of Coca-Coca slides in at 140 calories, but Cherry Coke, Orange Fanta and Mello Yello miss the cutoff.

So the cup size would be cut down to 10 ounces or the recipes would add a bit less sugar or there would be two different cup sizes. The sweeter the drink, the more you need to think about making it small.

To be consistent, the ban would apply to all beverages, not just sodas and teas. Even orange juice. Fructose is sugar, and orange juice has a lot of fructose. (Yes, it has vitamin C, too, but scurvy isn't a big problem in the U.S. today.) If you want to help a diabetic in insulin shock, you give him orange juice to get his blood sugar back up. A typical 8- ounce serving has 110 calories, of which 93 come from the 22 grams of fructose. Thus a 12-ounce cup or bottle of orange juice comes in at 139.5 calories from sugar, just under the wire. A 16-ouncer wouldn't make it.

And don't get me started on chocolate milk.

Barry Nalebuff is a professor of economics and strategy at Yale School of Management and is a co-founder of Honest Tea.

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