The fight against obesity is getting huge these days! The Walt Disney Company (NYSE:DIS) announced Tuesday that it will ban all ads for junk food on its TV, radio, and online networks directed towards children under the age of 12. This announcement comes on the heels of the recent decision by The Bloomberg Administration to ban the sale of soda in sizes larger than 16 oz in New York City. The ramifications of this move are far more spread than one might think. Members of the Disney media network include ABC, ESPN, A&E, and the History Channel.
In response to mayor Bloomberg, reporters were quick to point out that despite the widespread ban on soda’s of enormous sizes there is nothing stopping patron’s from purchasing two 16 oz soda’s or taking advantage of free refill programs offered at most fast food service locations. The move by Walt Disney may pack a bit more bite on the other hand. Coca-Cola (NYSE:KO) and Pepsi Co. (NYSE:PEP) are named among those who will be hit hardest by the changes in acceptable advertising, especially the latter as they run a billion dollar snack food company at Frito-Lay in addition to their sugary drinks division.
Since the announcement the Dow Jones Industrial Average has seen a significant rebound from last week’s lows and has risen 3.43%. The impact is already being seen at Coke and Pepsi who have only risen 1.17% and 0.43% respectively. Normally these stocks trade with a beta in the 0.5 range so we could have expected increases in the 1.7% range during the broad market rally.
Disney intends to develop a brand called “Mickey Check” to cross brand with healthier food items in order to distinguish them from other ‘bad’ food items.
Foodbeat’s Take: The question here is, how do the fast food companies adapt their menu’s and/or advertising so that they can continue to receive exposure through the vast Disney empire. I hope this doesn’t lead to a generation of children who don’t know the Oscar Meyer wiener song!
Sources: 247wallst.com, NY Times