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NY City giant soda ban gives three-month grace period for fines

By Jonathan Allen

NEW YORK (Reuters) - New York City will give restaurants and food outlets a three-month grace period before imposing fines for serving the large sugary drinks that will be banned, city officials said on Tuesday.

The board of the city's Department of Health passed the ban, the first of its kind in the nation, in September, arguing that excessive soda drinking was a significant cause of obesity and other health problems.

Under the new rules, most restaurants and food outlets will not be allowed to serve non-alcoholic, sugar-sweetened drinks in cups larger than 16 oz, the equivalent of a "small" drink at McDonald's restaurants. Certain groceries and stores that are regulated by the state rather than the city are exempt.

Although the ban takes effect in March, violators will be notified but not fined for the first three months. From June onward, violators will be subject to a $200 fine.

Similar grace periods were used in introducing other large-scale health initiatives that have been a hallmark of Mayor Michael Bloomberg's administration, such as a requirement that certain restaurants include calorie counts against items on their menus, officials said.

"The Health Department will begin enforcing the portion cap rule when it goes into effect on March 12th, but it will not seek fines for non-compliance for the first three months," Mark Muschenheim, a lawyer for the city, said in a statement.

The American Beverage Association and other business and trade associations and unions have gone to court over the ban, saying the Department of Health does not have the authority to pass such regulations under the city's charter.

The lawsuit argues that the ban robs consumers of a right to choose, and that it will harm the city's small businesses - sugary drinks are cheap to make but are sold at a relatively high mark-up.

A hearing is set for next Wednesday to decide whether the case should proceed.

(Editing by Paul Thomasch and David Gregorio)

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