A federal appeals court ruled a San Francisco law requiring health warnings on soda and sugary drink advertisements was unconstitutional. The decision — by a panel of 11 judges on the Ninth U.S. Circuit Court of Appeals on Thursday — affirmed a previous ruling in 2017 that San Francisco appealed.
The ordinance was enacted in 2015 and would have required advertisements to issue a warning that consuming sugary beverages "contributes to obesity, diabetes and tooth decay." The American Beverage Association, the California Retailers Association and the California State Outdoor Advertising Association challenged the law.
The ruling orders a San Francisco U.S. District Court judge to serve a preliminary injunction against implementing the ordinance. "The required warnings … offend plaintiffs' First Amendment rights by chilling protected speech," Judge Susan P. Graber wrote in the majority opinion.
In the face of increased scrutiny from both government and consumers, this ruling is a big win for the soda industry. The ordinance — which was supposed to take effect in 2016 — has been on hold while the case was heard in the courts. Companies that sell these sugary beverages have been fighting taxes, health warnings and regulation that have hurt business.
The court ruled this law violated the First Amendment, and the factual accuracy of San Francisco's warning that drinking these sugary drinks can lead to obesity and other diseases was disputed. In their ruling, judges used language from the Food and Drug Administration that sugars are "generally recognized as safe" and "can be part of a healthy dietary pattern" when not consumed in excess.
This ruling was a much-needed win for big soda. In recent years, consumers have been drinking fewer carbonated soft drinks. The market has been wrestling with slumping sales because shoppers are turning to healthier options instead of soda. In the U.S. beverage market, soda's share fell from 22.1% in 2012 to 19.7% two years ago, according to the Beverage Marketing Corporation. This new ruling means that soda companies could avoid additional scrutiny when it comes to health warnings and use the language of the court's ruling to defend themselves.
"We are pleased with this ruling, which affirms there are more appropriate ways to help people manage their overall sugar consumption," the American Beverage Association said in a statement emailed to Food Dive.
Added sugars are already getting a callout on Nutrition Facts label changes going into effect in 2020 and 2021, but some organizations, states and cities are arguing that more needs to be done. San Francisco is not alone in criticizing the soda business. Late last year, the American Medical Association said it wanted the Food and Drug Administration to enforce front-of-package warning labels for high levels of added sugars. New York had also considered putting warning labels on sugary drinks after a push from lawmakers.
Although the appeals court made its ruling, even this case isn't closed yet. John Cote, a spokesman for the City Attorney's Office, told the San Francisco Examiner that the city plans to continue fighting for the law.
"We're evaluating our next steps in light of this decision. But make no mistake: we're committed to protecting the health of San Francisco residents by allowing them to get factual information," Cote said.
If the ruling is upheld, it could make other cities and states hesitant to enforce similar health warnings. But soda companies are also dealing with scrutiny from other angles as well. As obesity and diabetes rates increase, there have been more guidelines advising against soda and sugary drinks. Soda companies have tried to stop this from hurting business by methods including trying to influence public health officials in the U.S. and other countries to push exercise over diet as a means to stay healthy, but that has only led to more controversy.
Additionally, the increasing implementation of soda taxes have also kept sugar reduction front and center for consumers. Several cities have passed taxes on sugary drinks and more plan to do so. These taxes have cost soda companies and grocery stores in these cities, leading to layoffs and losses.
To fight back, big soda companies — including Pepsi, Coca-Cola and Keurig Dr Pepper — have spent a lot of money backing campaigns banning grocery taxes, which include soda taxes. Couching the issue as protecting consumers against additional taxes on essentials has led to victory in several states.
Although this court case about on-package warnings appears to be a win for soda, manufacturers continue to face scrutiny, so the battles are surely far from finished.