The soft drink industry is trying to convince the Food and Drug Administration to delay the use of the revolutionary low-calorie sweetener aspartame in diet sodas--at the same time that major companies in the industry are trying to buy large quantities of the sweetener.
The National Soft Drink Association (NSDA), which represents the nation's major soft-drink makers, is raising health- and quality-control concerns about the sweetener, which the FDA recently approved for use in carbonated beverages. Aspartame is expected to eventually replace saccharin as the staple of the diet-soda business and spur increased demand for diet soft drinks.
But industry sources and analysts see different reasons for the NSDA objections. They say the industry wants to delay final FDA approval until the companies are financially ready to introduce another new product into the already crowded soft-drink market. The two industry giants, Coca-Cola Co. and Pepsico Inc., particularly are said to be afraid that rival 7-Up will use the new sweetener to extend its successful no-artificial-ingredients, no-caffeine campaign before they are ready to compete in the next marketing sweepstakes.
Industry sources also point out that aspartame is nothing new to the soft-drink industry since the same companies have been selling soda made with the sweetener in Canada under their U.S. brand names for the past few years. Aspartame-sweetened soft drinks hold about 20 percent of the Canadian soda market.
"There are clearly some companies who would like to see it delayed," said a key industry source. "For some people, if they could have their wish tonight, they'd wish that this thing could come along a year from now. Others wish that it would be available right away."
Emanuel Goldman, a soft-drink analyst for Montgomery Securities in San Francisco, said, "This is an interesting twist, the aspartame thing, because over the years, the industries have complained that they've been messed up, their plans untracked and delayed, because the government hasn't approved something. Now we have the companies complaining because the government has approved something."
The real reasons for the companies' reluctance to introduce aspartame-sweetened diet soda, according to industry sources, lie in the highly competitive forces that drive the $25 billion soft-drink industry.
The industry has been thrown into turmoil in the past two years by Coca-Cola Co.'s highly successful introduction of Diet Coke and by 7-Up's anti-caffeine campaign, which has forced other soft-drink makers to introduce caffeine-free versions of their products.
The result has been a sometimes-confusing proliferation of brand-names and soda varieties on grocers' shelves and in soda machines. Drinks made with aspartame would add yet another set of products, as well as trigger massive advertising campaigns to introduce the new sodas.
Industry executives and analysts interviewed this week say the big cola makers fear 7-Up will replace saccharin with aspartame in its diet sodas as soon as it can and then mount a marketing blitz trumpeting its diet soda's saccharin-free qualities. 7-Up officials say they have yet to decide what to do about aspartame.
Coca-Cola and Pepsi, which control nearly two-thirds of the nation's soda market, fear that, because aspartame is still in relatively short supply, 7-Up could corner the market until its only manufacturer, G.D. Searle & Co., can make enough of the sweetener to go around. As a result, Coca-Cola and Pepsi can't unilaterally decide not to offer aspartame products.
Officially, all of the major soft-drink manufacturers say they are studying the situation and have not yet decided whether to market soda sweetened with aspartame. Officials from both Coca-Cola and Pepsi say they support the NSDA effort.
7-Up officials, however, say that while the company has traditionally backed the NSDA, they would review any actions by the association on the aspartame dispute.
In the meantime, Searle says the soft-drink makers are trying hard to secure supplies of the new sweetener. "If anything, discussions with soft-drink companies are accelerating," said Robert Shapiro, head of the Searle division that makes aspartame for commercial use. "And in those discussions I haven't heard any reluctance. There's been anything but that."
The FDA, which had previously approved aspartame for use in some foods and as a tabletop sweetener--sold under the trade names Equal and Nutrasweet--gave its blessing to the substance's use in carbonated beverages earlier this month, effective Aug. 7.
The NSDA wrote a letter to the FDA in late June asking that aspartame's approval be delayed. The letter raised questions about aspartame's ability to keep its sweetness in high temperatures and over extended periods of time, and expressed concern about possible health problems connected with its use. But the FDA, which approved aspartame for other uses last year, has said it is satisfied that aspartame won't cause quality-control problems for soft-drink makers or health problems for users. Indeed, the FDA says aspartame is the most extensively tested food additive it has ever approved.
But an industry official said, "It just seems that the safety issues far outweigh the competitive issues right now." And the NSDA is considering a formal request that the FDA rescind its approval of the sweetener.
"We have been down this road before with cyclamates and saccharin," the industry official said. "All I think the industry is asking is, let's take care of these issues ahead of time and not when the companies' names are on the products."