In 1985, Coca-Cola, the Fortune 500 soft drink company based in Atlanta, rolled out “New Coke,” a modest overhaul of the phenomenally successful formula the global company had for decades used in its flagship beverage. The switch backfired with the public, and Coca-Cola quickly reversed course, returning to what had brought consumers by the billions to its products.
The spectacular failure of “New Coke” was based entirely on the market. People wanted what they knew and loved, and they reacted quickly and negatively when it was taken from them. This is precisely how our economic system is supposed to work.
Now, thanks not to market forces but to action undertaken by the State of California — the land of fruit, nuts and overzealous nanny-staters — Coca-Cola and Pepsi, its largest competitor, have been pressured to make changes to their soft drink formulas to avoid a new, punitive regulation. Regulators in the Golden State have decided that if the companies don’t change their soft drink formulas, they’ll have to label their drinks as “cancer-causing.”
Regulators have the authority to impose the labeling requirement thanks to Proposition 65, which was passed by California voters in 1986 and has been used as a regulatory hammer ever since. The regulations promulgated pursuant to Prop 65 require that any product containing certain chemicals and ingredients that are deemed to be carcinogens must contain a “clear and reasonable” warning that it “contains a chemical known to the State of California to cause cancer.”
Last October, bureaucrats in the state added 4-methylimidazole, or 4-MI, to the list of potentially dangerous chemicals. Soft drink companies have long used 4-MI to give drinks a caramel coloring.
Bureaucrats reportedly decided to add 4-MI to the list of potentially dangerous chemicals based on the results of a single study, which found that animals exposed to extremely high levels of the chemical developed cancer. The California Office of Environmental Health Hazard Assessment, not wishing to consider any research in conflict with its own, dismissed another, two-year study of 4-MI which found that the chemical didn’t cause rats or mice to develop cancer.
Meanwhile, some so-called advocacy organizations are pushing to have the Food and Drug Administration (FDA) impose a nationwide ban on 4-MI. It’s unclear whether they’ll succeed, though in a rare display of common sense an FDA spokesman recently explained to NPR that “a consumer would have to consume well over a thousand cans of soda a day to reach the doses administered in the studies that have shown links to cancer in rodents.”
In other words, California’s regulatory action is little more than an excuse to inconvenience soft drink makers and cause them significant expense. Sadly, as happens all too frequently when companies are faced with succumbing to unreasonable government mandates or fighting them, neither Coca-Cola nor Pepsi stood up to this regulatory bullying and junk science. The soft drink giants announced they already have changed the formulas they use for the soft drinks they sell in the U.S., and plan to do the same for the soft drinks they sell in Canada, where “public interest” groups are bringing pressure on the government to issue a mandate similar to that in California.
If companies like Coca Cola and Pepsi believe that caving in this time to government mandates based on junk science will prevent similar actions from occurring in the future, they are badly mistaken. Negotiating with one’s enemies only emboldens them to torment you further.
Bob Barr represented Georgia’s Seventh District in the U.S. House of Representatives from 1995 to 2003. He provides regular commentary to Daily Caller readers.