Crains New York - July 30, 2012 - (Page 6)

THE Ban threatens soda fountain INSIDER Mayor’s size limit could crimp sales, change bottling get that the purpose of this ban is for people to consume less soda,” said Jorge Olson, president of beverage consultancy Premier Brands Inc. It turns out that the three major bottling plants in the city—PepsiCola Bottling Co. of New York in BY LISA FICKENSCHER College Point, Queens, and Canarsie, Brooklyn, and Coca-Cola ReWhat a difference four ounces makes. freshments in Maspeth, Queens— If New York enacts a rule to limit don’t even make 16-ounce bottles. bottles and cups of soda and other They make 12-ounce cans and 20sweetened beverages to 16 ounces, ounce, 1-liter and 2-liter bottles. down from the ubiquitous 20 ounces If the ban is enacted, they will eior even 32 ounces, the ripple effect ther have to purchase 16-ounce botcould include job losses and millions tles from manufacturers outside of of dollars in retrofitted manufactur- the city or retrofit their machinery, ing equipment, say which is made in Italy beverage industry and Germany. And executives. neither company is Of course,a reducsure its machines can tion in the city’s skybe retrofitted. rocketing obesity “It’s a sophisticatrates could be anothed process, to make a er side effect. bottle of soda,” said The health beneJoe Vitta, secretary fits of a ban on over- A 20-ounce sugary drink can treasurer of Local size sugary drinks, contain the equivalent of 16 812, which represents which will be voted packets of sugar. the workers at the on in September, are Source: NYC Department of Health and three plants. “Every Mental Hygiene obvious. If people bottle has a specific consume fewer calolabel and design.” ries—the intended goal of the As the companies weigh their ban—they could lose weight and options, they have told Mr. Vitta avoid obesity-related diseases. that the regulation would result in job losses because they expect to New bottling machinery needed make and sell less soda here. For local beverage manufacturPepsi-Coca Bottling Co. bottles ers, however, complying with the such brands as Gatorade, Mountain proposed regulation will present Dew, Tropicana juices and Hawaimany logistical challenges and most ian Punch, in addition to Pepsicertainly a dip in sales.“Let’s not for- branded products. It also operates buck ennis six warehouses. Executives from the company did not return calls, and neither did Coca-Cola Refreshments executives. by Andrew J. Hawkins and Shane Dixon Kavanaugh Some 8,000 jobs The two companies employ about 2,400 workers. Altogether, there are 8,000 people employed in the soft-drink business in the New York metropolitan area, according to Mr. Vitta. These companies also supply vending machines, which would require retrofitting, or in some cases, replacement. “If you put a 16-ounce bottle in a machine that carries 20-ounce bottles, it’ll jam,” said Terence Poletti, owner of Brooklyn Heights Beverage Distributors, which distributes Pepsi products to pizzerias, delis, restaurants and vending machines. Another problem unique to the New York market is the high cost of real estate, which has limited the size of the three production facilities here. “They couldn’t wedge another thing into their plants,” said Mr. Vitta. As Mr. Olson sees it, the beverage makers will have little choice but to change their offerings. Most in the industry believe the regulation, championed by Mayor Michael Bloomberg, will be approved by the Board of Health. If so, it will take effect in March 2013. “The industry has to adjust and produce products with fewer calories and less sugar and come up with new products,” Mr. Olson said. G Secrecy could hurt Cuomo in 2016 ov. Andrew Cuomo’s penchant for information control is not bothering New Yorkers, but could damage his political prospects down the road, insiders said. The New York Times and the Albany Times Union reported that Cuomo staffers had pulled documents from the state archive for his tenure as attorney general. The governor sends untraceable Blackberry messages rather than emails. And his office collected a dossier on at least one reporter. “It’s just weird,” said an Albany insider. “Over the long run, you establish a narrative of a creepy, Nixonian-type government, and that begins to erode people’s confidence.” But voters don’t often care. Mr. Cuomo’s approval rating is above 70%. His image as a nonpartisan, effective manager will likely be sustained into the 2016 presidential race. Still, the air of secrecy could be an obstacle if Mr. Cuomo takes his ambitions national. Editorial boards, for example, don’t look kindly on candidates with transparency issues. thawing,” an insider said. Mr. Sitt said he feels “vindicated” by Coney Island’s recent record crowds and flurry of new businesses. Joseph Sitt “Everybody talked about its demise a few years ago and counted the death toll,” Mr. Sitt said, referring to amusement district businesses he shuttered while battling the administration. “But it’s clear that there’s a way to keep Coney Island’s flavor and at the same time move it forward.” “If you run for president, you don’t want the [Washington Post’s] Marcus Brauchlis, or the [Times’] Jill Abramson, or whoever is the editor of the L.A. Times or Chicago Tribune, or Tina Brown or those people thinking that you’ve got a guy with a secrecy problem,” said one longtime Albany observer. One political operative suggested that press coverage of the governor has been so positive that his team overreacts to the occasional negative story. “When reporters show streaks of independence, … the outcry is amplified by its infrequency,” the operative said. “[Cuomo staffers] react like the world’s coming to an end. No, it’s not. It’s just Tuesday.” Donor fatigue The city’s political ATM is nearly tapped out from high-stakes federal races. Yet burned-out donors are being hit up by 2013 city candidates. “They’re so busy maxing out on the presidential, on the Senate, on the House, and they’re like, ‘Yeah, we’ve got to do all this city stuff, too?’ ” said one fundraiser. Gov. Andrew Cuomo’s 2014 campaign is also vacuuming up cash. “He is taking the air out of whatever funding we’ve got,” said Richard Anderson, president of the New York Building Congress. Sitt makes peace The long feud between Joseph Sitt and the mayor’s office may be over. The city quietly rezoned land owned by the Brooklyn developer to make way for a nearly 200,000square-foot retail project—his first green light from City Hall since their clash over the redevelopment of Coney Island. The Thor Equities chief has also begun speaking publicly about the peninsula’s future for the first time in years. “Sitt’s cold war with the city is For daily political and government news, subscribe to CRAIN’S INSIDER @ www.crainsnewyork.com/insider 6 | Crain’s New York Business | July 30, 2012 buck ennis newscom http://www.crainsnewyork.com/vcfundingalert http://www.crainsnewyork.com/vcfundingalert http://www.crainsnewyork.com/insider

Table of Contents for the Digital Edition of Crains New York - July 30, 2012

Crains New York - July 30, 2012
Contents
In the Markets
The Insider
Business People
Real Estate Deals
Opinion
Alair Townsend
Greg David
Small Business
Corporate Finance
Classifieds
For the Record
From Around the City
New York, New York
Source Lunch
Out and About

Crains New York - July 30, 2012