On the Money

SF eyes sugar warnings as lobby blasts 'failed logic'

Is soda the new tobacco?

With diabetes and obesity rates a major source of public health concern, San Francisco is becoming the first city to require health warnings on advertisements for soda and other "sugary drinks."

Following in the footsteps of New York City—where former mayor Mike Bloomberg famously took aim at salt, soda and trans-fats, among other things—San Francisco plans to tag certain beverages with warning labels. The language on the ads will read: "WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes and tooth decay. This is a message from the City and County of San Francisco."

In an interview with CNBC's On the Money, Rick Berman, a beverage industry advocate, says the warning label is unnecessary and "fails the logic test."

He added: "If you've got an IQ above room temperature, you know that soda has sugar in it and it has calories in it." Berman also questioned why the Golden Gate City is specifically singling out one product category.

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"Cakes, cookies, candy, ice cream—they all contribute to obesity," Berman said. "So, if you going to have the logic that you have to put warnings out on … these soft drinks, obviously you have to put it out on others."

In a separate interview with CNBC, Scott Wiener—sponsor of the bill and a member of the San Francisco Board of Supervisors—addressed that criticism.

"Their argument is the same as saying, 'Well, cigarettes aren't the only cause of lung cancer and emphysema, therefore, don't regulate cigarettes.' "

Echoes of Mike Bloomberg

A store owner stocks soft drinks in a shop in Miami Florida.
Getty Images

Wiener added that "of course, there are other unhealthy things people eat and drink but here we have a particular product that is almost half the sugar in the American diet that is absolutely scientifically linked to diabetes. And we have a responsibility to address it. "

Berman is a public relations veteran and executive director of the Center for Consumer Freedom, a nonprofit organization "devoted to protecting consumer choice."

Berman compared San Francisco's action on soda to the attempt by Bloomberg to ban large-size sugary drinks in New York. The crusade was hailed by health advocates, but widely mocked by opponents, which assembled a coalition to oppose the initiative.

Yet New York's highest court ultimately rejected the NYC regulation, the last word in a series of ensuing legal challenges. The law would have banned restaurants and businesses from selling sugary beverages larger than 16 ounces.

"The court said it was arbitrary and capricious on Bloomberg's part," Berman said, "and you can say the same thing here because there's an arbitrary attack on soft drinks."

The San Francisco ad warning applies to any drink where added sugar produces "25 or more calories per 12 ounces." The legislation also requires the "size of the warnings" must be "at least 20 percent of the ad space."

Wiener told CNBC the "sugary drink" warning goes beyond soda to include "sport drinks, energy drinks, sweetened teas and sugary coffee drinks." Yet drinks where sugar occurs naturally, like orange juice or milk, are exempt.

Berman, however, pushed back against that carve-out. "While orange juice doesn't have added sugar, it has the same calories ounce-for-ounce as Pepsi," he said.

The idea of a ban may be moot, as soft drink consumption has largely been on the decline in the U.S. According to Beverage Digest, soda sales dropped for the 10th-straight year in 2014.

Read MoreSoft drink sales hit a decade of decline

San Francisco's Wiener says the city will provide a one-year grace period before health warnings will be required on sugary drink ads on "publicly owned property" in San Francisco.

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