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March, 2010:

The Philadelphia soda tax will mean the end of Free Refills

Philadelphia is on the verge of passing a sweeping soda tax that could herald the end of restaurants offering free refills for Philadelphians.

It’s a dark day indeed for the City of Brotherly love.

So far, most of the media coverage of the proposal focuses on the two cents per-ounce tax it would impose on bottled and canned sodas and other sweet drinks. This would increase the cost of a typical can or bottle of Coke by about 60 percent.  But little noticed in the legislation is an eighteen-cents-per-ounce tax on the syrup that restaurants use to mix coke. This tax would increase the cost of serving a fountain drink by between 100 and 350 percent.

To see how, let’s take a look at the cost structure of fountain drinks and free refills.

Restaurant industry blog Foodservice Friends estimates that the total cost of serving a 20-oz soda is about 22 cents.

Here is their estimate of how that cost breaks down:

Syrup for a 20-oz cup of soda (8.75 oz with ice): $0.12

20 oz foam cup: $0.07

Lid for cup: $0.01

Straw: $0.015

Total Cost = $0.215 or rounded up $0.22 per soda

The point here is not the specific figures, but to show that syrup is the primary cost in every soda restaurants serve. And this assumes you’re paying $50 for a standard five-gallon case of syrup. That price seems right for off-brand sodas, but is rather low for Coca-Cola or Pepsi, which typically run about twice that price and are likely to cost even more.

So if the restaurant offers free refills—as it should—the syrup used in each glass is pretty much the only cost the restaurant incurs (other than labor) for each refill.

But what happens if the Philadelphia soda tax is imposed? The price of syrup is tippled. The proposal’s eighteen cent per-ounce tax on soda syrup, which seems small, causes a huge spike in the price per cup. On a typical five-gallon case of syrup, there would be $115.20 of taxes—which would double the cost of name-brand syrup and more than triple the cost of off-brand syrup.

What would happen if each refill of soda cost a restaurant 35-50 cents instead of the 10-15 cents it costs now? Well, I can’t image they’d offer free refills for too much longer. Either that or the price of a soda would have to start at $5 to maintain profit margins.

So what can you do to help stop the free refills killing Philadelphia soda tax? Head over to savephillyjobs.com and sign their petition. Then call your representatives and tell them you oppose a soda tax—it’s a good idea even if you don’t live in Philly —because a soda tax may be coming to your town next.

What does a soda tax look like?

The folks over at SavePhillyJobs.com have posted a PDF of Philadelphia’s proposed soda tax law. You can check out the official document here, but I’ve copied the important sections below.

(1) Sugar-sweetened beverage. Any non-alcoholic beverage which lists any form of sugar, including high fructose corn syrup, as a listed ingredient; or which is prepared at the point of sale by mixing water with any syrup which lists any form of sugar, including high fructose corn syrup, as a listed ingredient; except that sugar-sweetened beverages shall not include baby formula. Sugar-sweetened beverages include, but are not limited to, soda; non-100%-fruit drinks; sports drinks; flavored water; energy drinks; and pre-sweetened tea. Sugar-sweetened beverages do not include unsweetened drinks to which a purchaser can add, or can request that a seller add, sugar, at the point of sale.

The Department of Public Health is authorized to promulgate regulations to clarify the inclusion or exclusion of particular products.

§ 19-3602. Imposition and Rate of the Sugar-Sweetened Beverage Tax.

(1) There is hereby imposed a tax on the privilege of selling at retail any sugar-sweetened beverage, including but not limited to sales of pre-packaged beverages, sales of fountain beverages, sales at restaurants, and sales from vending machines.

(2) The rate of tax shall be two cents ($.02) per ounce sold of pre-packaged beverage; and 18 cents ($.18) per ounce of syrup used for sales of fountain drinks; all subject to the following adjustments:

(a) The rate for each calendar year (or such other accounting year allowed by the Department) commencing on or after January 1, 2011, shall be certified by the Department to the Chief Clerk of Council no later than the immediately preceding December 15. The Department shall calculate the rate by multiplying the then-current rate by the CPI Multiplier. The CPI Multiplier shall equal the ratio of the most recently published Consumer Price Index for All Urban Consumers (CPI-U) All Items Index, Philadelphia, Pennsylvania, United States Department of Labor, Bureau of Labor Statistics (“CPI”), on December 15 to the most-recently published CPI on the immediately preceding December 15. The rate shall be expressed in dollars per ounce, rounded to the nearest one-ten-thousandth of a dollar (four decimal places).

A couple thoughts on this:

Two cents per-ounce is a whopper of a tax. It is twice the rate that has been floated in New York and at the national level. If implemented, this tax would add nearly 60 percent to the cost of your typical twelve pack.

The eighteen cent per-ounce tax on soda syrup would almost certainly mean the end of free refills in Philadelphia, as it will increase the cost of the primary ingredient in soda by between 100 and 300 percent (depending on if a restaurant serves brand name or generic soda).

The tax is indexed to inflation. So unlike beer, the tax burden will not decrease over time.

Although it is being sold as a soda tax, it is structured in such a way that it will apply to a wide-range of beverages from juice, to chocolate milk, to energy drinks, to fancy coffee-based beverages.

Sarkozy’s special espresso machine

I am a big Nicolas Sarkozy fan, but demanding that Columbia University procure a special espresso machine to make his pre-lecture coffee is a bit much.

The New York Post has the details:

Carla Bruni isn’t the only thing Nicolas Sarkozy likes hot and Italian — the French president demanded a special espresso machine when he visited Columbia University yesterday.
Organizers of his appearance revealed that the finicky French leader had insisted his choice of espresso machine be provided.

In addition to ensuring that he was properly caffeinated, Sarkozy also flew in a plush rug and distinctive podium for his talk on world affairs.

Someone should have probably told him that our normal coffee selections are rather good as we don’t serve Nescafe Instant Coffee like they do back in Europe.

Soda companies show a united front [ads]

At my high school, the senior class was given the Coke machine as a fundraising tool. Seniors were responsible for paying the Coke supplier and keeping the machine stocked. As compensation, they got to keep all of the profits for the class.

Needless to say it was a gold mine–even at a small school with only 350 kids from 6th-12th grade.

The reason it was so profitable was because we kept it stocked with drinks that people enjoy, like Coke, Cherry Coke, Dr. Pepper and Sprite. If I recall correctly we only had one “Diet” option and stopped stocking Dasani water because it was always the worst seller. Instead we used that slot for, you guessed, more Coke.

This is all by way of saying that I’m a little bit sad that in face of growing criticism from ‘health advocates,’ Coke, Pepsi and Dr. Pepper announced they will stop selling full-calorie drinks in schools. Now it looks like everyone will have to drink “Diet Coke.” Back in my day, we only had one slot in the vending machine for that.

At least they put up a good “image ad” to tout the initiative.

“Rivals” TV Ad from American Beverage Association on Vimeo.

#27. Not adopting the metric system [because we can]

Being the richest, most bad ass country in the world is kind of like being the captain of the high school football team: There are certain privileges that come with the position.

In the case of high school, that means not having to lug heavy equipment around and getting the hottest (and often dimmest) dates to prom. In the case of the United States it means that we don’t have to adopt sissy global conventions like the Metric System of measurement just because everyone else does.

I’ll have more on the Metric—or Communist—system of measurement in the next day or two. Until then I’d like to leave you with this map of countries that have refused to capitulate to Napoleon’s yard stick. The grey countries use the Metric System.

Yeah, we’re pretty bad ass.

[map via Wikipedia]

Will your next bottle of Coke be square?

Turns out that the inverted hourglass shape of a standard coke bottle wastes a lot of space in shipping containers. And of course wasted space = wasted money.

Industrial design student Andrew Kim thinks he has a solution: square coke bottles. His design, which is touted as a green alternative to the current bottle, would dramatically reduce shipping costs and save space in landfills. Sounds like a win-win.

Of course an alternative way to cut down on bottle waste would be for more stores and restaurants to offer free refills.

There is no word yet on if Coca-Cola is interested in implementing the design.

[The Dieline]

ConEd gives up on Greenwashing, keeps lights blazing during Earth Hour

When confronted with a massive, coordinated campaign to get millions of people worldwide to drastically reduce their electricity usage for one hour there are two ways a utility company can respond: They can attempt to ‘Greenwash’ their business by partaking in the feel-good environmentalism or they can just stand up and own their carbon-spewing industry for what it is.

During Earth Hour 2009, Consolidated Edison took the former approach and joined with the owners of other landmark NYC buildings in turning off their exterior lights for an hour.

This year, however, ConEd apparently decided to adopt the ‘own it’ strategy.

While most other NYC landmarks went dark from 8:30 to 9:30 PM on Saturday, ConEd decided to keep its Union Square tower illuminated in all of its blue glory. (See photos below)

Fitting, I suppose, since they are the power company.

[2009 photo via Inhabitat, 2010 photo via Earth Hour]

This rest area brought to you by Nike [naming rights]

sign 6We sell the naming rights to sports stadiums, parks and even potholes. So why not sell the naming rights to highway rest areas? That is precisely what New Jersey is considering doing.

Facing a crippling budget deficit and strong public opposition to closing highway rest areas, the New Jersey legislature is considering selling the naming rights of them to big corporations. I guess the thinking is that companies might pay top-dollar to be associated with the kind of relief that a rest stop can provide.

My only question is will they expand the program to allow you to sponsor a specific bathroom stall, kind of like we do with park benches?

Will the safety experts call for a bumper sticker ban now? [distracted driving]

IMG_5738cr.jpgTrying to read a bumper sticker on another car can be distracting for many of us. And it can be especially dangerous if you tailgate the car in order to get a better view of the sticker.

But for some people, seeing a simple Obama-Biden sticker is enough to send them into a mad rage and deliberately cause an accident. Perhaps the New York Times will add bumper stickers to their growing list of things we should ban in the name of road safety.

WKRN Nashville has the details of one case of bumper sticker road rage:

NASHVILLE, Tenn. – A Nashville man says he and his 10-year-old daughter were victims of road rage Thursday afternoon, all because of a political bumper sticker on his car.

Mark Duren told News 2 the incident happened around 4:30p.m., while he was driving on Blair Boulevard, not far from Belmont University.

He said Harry Weisiger gave him the bird and rammed into his vehicle, after noticing an Obama-Biden sticker on his car bumper.

Duren had just picked up his 10-year-old daughter from school and had her in the car with him.

“He pointed at the back of my car,” Duren said, “the bumper, flipped me off, one finger salute.”

But it didn’t end there.

Duren told News 2 that Weisiger honked his horn at him for awhile, as Duren stopped at a stop sign.

Once he started driving again, down Blair Boulevard, towards his home, he said, “I looked in the rear view mirror again, and this same SUV was speeding, flying up behind me, bumped me.”

Duren said he applied his brake and the SUV smashed into the back of his car.

He then put his car in park to take care of the accident, but Weisiger started pushing the car using his SUV.

Duren said, “He pushed my car up towards the sidewalk, almost onto the sidewalk.”

Police say Harry Weisiger is charged with felony reckless endangerment in the incident.

Vive Le Free Refills! [soda tax]

This is what I like to see: people standing up against the free refills-ending soda tax in Philadelphia. You can keep informed about the campaign to stop the soda tax by following savephillyjobs on twitter or by visiting their website.

It’s been defeated at the national level.

It’s been defeated in New York State.

Now it is time to defeat to defeat the soda tax in Philadelphia!

You can see more pictures of the rally here and follow our continuing coverage of the national soda tax debate here.

(Photo from Matt Petrillo)

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