Bloomberg and the Soda Law Essay

The soda law introduced by Mayor Bloomberg to ban the sale of sodas larger than 16 fl. oz. at restaurants across the city will have zero to minimal economic impact on people who are currently buying them. The soda ban will have an extremely small net positive economic impact on businesses. And the rationale behind this is the fact that whoever drinks more soda will acquire more soda, regardless of how big or small the drink is. A 20 fl. oz. soda, when banned will be replaced by a 16 fl. oz. cup of soda. How much soda an individual drinks may even increase if instead of drinking just one 20 fl. oz. soda, he decides to get a refill of his 16 fl. oz. soda, something that most restaurants allow. The benefits projected for the society from this law, that may reduce obesity are preposterous. The cost of soda for restaurants is roughly $0. 0132 per ounce (see Appendix). On a 20 fl. oz. soda, the net cost to the restaurant is about $0. 22 (Appendix). A 20 fl. oz. cup of soda at an establishment such as McDonald’s, perhaps the main target of this law, sells for roughly $2. 50. Once the 20 fl. oz. cup is gone, it will be replaced by the 16 fl. oz. cup, but at the same price. The restaurants will re-label the 16 fl. oz. cup as the new large, introduce a 12 fl. oz. cup as a medium and keep the 8 –ounce cup as a small. But will this add significantly to the revenues of the restaurant? It is very unlikely, since the customers will just get refills for their 16 fl. oz. cups. The only economical benefit for the restaurant might be the people who do not refill their cups and this is minimal since the cost of soda is just a rounding error for most restaurants. This law is ineffective because it does not stop the consumer from consuming any less soda from what was being consumed before. The economic impact on the society will be in the red because of the hundreds and thousands of dollars spent on structuring the bill, the flawed methodologies of research that determined a small cup would result in less consumption of soda, and finally the money spent by various groups opposing or supporting this law. To effectively tackle the problem of obesity, the government needs to look at other avenues. Soda is a big cause of obesity, it is made of sugar and has calories, but the ban on a larger serving is not the solution. An effective solution would be to raise the taxes on sodas. Another solution is to ban refills, thus prompting the customer to purchase another soda, which will either discourage the purchase or add more to tax revenues collected by the government. In turn, this tax revenue can be used to build jogging tracks, exercise equipment and other recreational facilities for the community. Another option for the government is to advertise the ill effects of drinking soda and promote healthier alternatives such as fruit and vegetable juices at affordable prices at those restaurants. There are several other options for soda drinkers to consume the same amount of soda when this law is enforced. Restaurants and movie theatres give free refills, convenience stores such as 7-11 are exempt from this law, and grocery stores still sell the large bottles and cases. The answer to this problem lies in educating the people about the ill effects of soda and only then will this law be economically beneficial for the society. This law does not have any health benefits that can be converted in to economical benefits for the society. Appendix: â€Å"Costing Out Soda & Free Refills – How to Price Soda. † Wholesale Food & Restaurant Distribution by Pate Dawson Company. Pate Dawson Company, 2009. Web. 10 Oct. 2012. .