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Soda war's greatest irony: Big Gulps are safe

March 13, 2013: 10:58 AM ET

How the drink that started it all - the Big Gulp from 7-Eleven - managed to get excluded from the soda wars.

The drink that started it all.

The drink that started it all.

FORTUNE – The war on soda stalled this week when a judge declared New York's proposed ban on big sugary drinks invalid. This was a huge setback for Mayor Michael Bloomberg, who wanted to leave a legacy as the mayor who rid the city of not just one evil, but two: Smoking (which he banned in bars and restaurants in 2002) and sugar.

To combat obesity, Bloomberg pitched the ban on sodas bigger than 16 ounces to New Yorkers and urged cities worldwide to follow. While the plan was well intended, it had little teeth. Even if it had passed the court's muster, the voluminous loopholes and contradicting exclusions wouldn't have done much to reel in the U.S. beverage industry.

For one, as the ruling judge noted, the policy excluded other beverages that have significantly higher concentrations of sugar sweeteners. And it would apply only to certain sugared drinks -- dairy-based beverages like milkshakes, for instance, would be exempt.

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Of all the exemptions, though, nothing was more curious than the one excluding the mother of all big, sugary sodas -- the 7-Eleven Big Gulp!

That's like banning cigarettes but letting ads of Joe Camel run between cartoon shows.

Introduced in 1976, Big Gulps come in cups ranging from 20 to 50 ounces. They're loaded with calories: The Double Gulp, at 50 ounces, filled with Coca-Cola, has about 600 calories. Over the years, Big Gulps not only made big sugary drinks the norm, they also became a mainstay at pit stops dotted along U.S. interstates for everyone from traveling truckers and commuters on the go.

For all its ridiculous excess, the Big Gulp is immune to Bloomberg's ban. Which seems pretty pointless since the plan isn't so much a ban on soda as it is a limit on outrageous serving sizes.

If the exclusion seems wonky, the reasons behind it gets wonkier. Bloomberg's policy applies to restaurants and delis, but it doesn't cover grocery stores and convenience stores like 7-Elevens because they're not regulated by the Board of Health, which grades the quality of businesses where more than 50% of annual sales come from food for immediate consumption. The State Department of Agriculture and Marketing regulates convenience stores. This might seem like an arbitrary technicality, but it's more than that. Bloomberg's policy got the OK from the Board of Health, whose members were appointed by the mayor.

New York state Supreme Court Judge Milton Tingling took issue with that. In his opinion, he said the City Council, not the Board of Health, had the power to approve such a far-reaching initiative.

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Coincidentally (or not), Bloomberg's proposal comes at a time when 7-Eleven plans to expand stores in New York City. Say bye-bye to your neighborhood bodega. The chain has said the city is a key growth market -- partly a reflection of the scars left by the Great Recession, where convenience shops and bodegas were left struggling to grow and renew leases. Over the next several years, 7-Eleven plans to open 20 to 30 stores a year in New York City.

Thus far, the chain has 32 stores in Manhattan, nine in Staten Island, 10 in the Bronx, 40 in Queens, and 21 in Brooklyn.

On Tuesday, New York City challenged the judge's ruling, calling the decision by Tingling "contrary to law." It's poised to be a slog of a legal battle, and it will be worth watching if 7-Eleven, called "Home of the Big Gulp," will have to find a home elsewhere.

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About This Author
Nin-Hai Tseng
Nin-Hai Tseng
Writer, Fortune

Nin-Hai Tseng covers economics and finance. Before joining Fortune, Tseng was a reporter at The Orlando Sentinel and a public affairs associate at GE. She holds an MPA from Columbia University and a BS in Journalism from the University of Florida. She lives in New York City.

Email | @ninhaitseng | RSS

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