$1 million tab for Coca-Cola Co. if drink ban falls into place

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On behalf of Daniel Watkins of Watkins Firm, A Professional Corporation posted on Wednesday, March 13, 2013.

Business these days crosses borders. Even small businesses based in California are often required to learn the laws of another state on the east coast. Think about soft drink distribution. A manufacturing company may be based in California but might ship to Florida, New York or even Alaska. Think about Coca-Cola Co. How many places have you traveled where you couldn’t find a product made by the company? Probably very few around the world.

In fact, drink distributors across the world are more than somewhat concerned about what is happening in New York City. The city passed a ban that would target obesity by requiring that any sugary beverages sold in the city comply with a new, lowered size limit. Beverages that surpassed this limit would alternatively be banned from sale. Even though a judge invalidated the new order that was supposed to start on Tuesday, March 12, it has companies worried about the final resolution.

Again, look at the Coca-Cola Company. New York City is one of the company’s largest markets for a product called Honest Tea. The bottles that the company distributes were 0.9 ounces too large for the ban. Thus, they would have to not only decrease the amount of liquid in the bottles, but that means that the shape itself has to change. For this company, it means $1 million worth of changes in order to alter the shape of the bottle and pay for a new mold.

Not only are there costs associated with the production of the specialty item, but it creates a distribution nightmare. Distributors in the area have to make sure that they grab the smaller, New York City specific boxes and not any other ones.

Each of these changes may either alter a current business relationship or require a new one. With specific changes such as this, there are bound to be hiccups along the way. When it comes to business, a hiccup can cost a company and an attorney may be needed to settle a dispute.

Source: Crain’s New York Business, “Judge blocks sugary drink limit,” Lisa Fickenscher, March 11, 2013