The infamous soda battle of New York City

A recent ABC News story details the by-now-well-known proposal by New York City mayor Michael Bloomberg. From the article:

In his latest effort to fight obesity in this era of Big Gulps and triple bacon cheeseburgers, Mayor Michael Bloomberg is proposing an unprecedented ban on large servings of soda and other sugary drinks at restaurants, delis, sports arenas and movie theaters.

Drinks would be limited to 16 ounces, which is considered a small serving at many fast-food joints.

Now, let’s think about this for a minute: A 16-ounce (473 mL) limit would even ban 20-ounce (591 mL) bottles. A typical medium-size drink in most national chains is 20 ounces, sometimes up to 24 ounces (710 mL). (I say “national” because at Taco Cabana and Whataburger, 20 ounces is the small, 32 ounces (946 mL) is the medium, and 44 ounces (1.3 L) is the large. But what do you expect from Texas companies? We’d never let some Yankee tell us 16 ounces is as big as you can go.)

Once upon a time, sodas were commonly available in 16-ounce (glass) bottles. I’m not sure of the exact year of the change, but the common size for bottles now is the 20-ounce size (with some locations offering 1-liter bottles in some flavors). I know at least Coca-Cola offers aluminum bottles in 8.5 ounce (251 mL) which roughly correspond to a former glass bottle size (which I’m not sure if it’s still being made), but this is a specialty item that’s not sold very widely. The ones I bought were mainly purchased for the package design (that, and I was at a hotel and I didn’t feel like going all the way back down to the gift shop on the first floor).

Not surprisingly, it didn’t take long for a major soda company’s PR department to fire one right back:

“The people of New York City are much smarter than the New York City Health Department believes,” Coca-Cola Co. said in a statement. “New Yorkers expect and deserve better than this. They can make their own choices about the beverages they purchase.”

Kudos to Coca-Cola for striking back against this insanity. To be fair, they’ll feel anything that would kill sales in a city the size of New York, so it’s in their interest to say this is dumb. But I’m sure their customers feel the same way.

The article goes on to cite this nugget of dubious wisdom:

Bloomberg said people who want to guzzle soda would still be free to order more than one drink. But he said restricting servings to 16 ounces each could help curb consumption.

Now, I doubt this is actually true, and I’ll explain why. For one, most fast food restaurants allow free refills. Even some movie theatres allow free refills, which to be honest, at the prices charged is the least they can do. It’s not clear from everything I’ve read whether or not Bloomberg plans to ban those as well. If so, this is even worse than I could have imagined, and I would even say it could be considered restraint of trade if looked at in the right way.

Second, what I predict will happen is that people will start becoming less restrained about bringing in their own drinks. The sale on two 12-ounce cans or two 16-ounce fountain drinks will be lost to the convenience store with no limit. And the restaurant owners, rather than risk irking their customers and losing the sale entirely, will grow accustomed to seeing someone bring in a soda from the convenience store around the corner and just not say anything.

It’s obvious why Mayor Bloomberg is floating such an outrageous policy: in New York, the term limit for mayor is three terms, and this is his third term. So, not surprisingly, voters have little recourse should they feel he stepped over the line. However, it would not surprise me in the least if Bloomberg’s successor decides to repeal this law should it pass very early in the term.

So my response to this short-sighted proposal is this: If Mayor Bloomberg really cares about health, how about an aggressive tax against tobacco products (cigarettes, cigars, smokeless tobacco, etc)? Make it so expensive to smoke in New York that people will have to quit due to financial reasons. That will do far more for health than any silly “you can only have a small soda” law. And if for some reason cities can’t tax cigarettes in New York State, then the law up there is even more broken than I thought.

The future of event ticketing, maybe

Some of you may remember my previous post on ticket scalping made in response to Trent Reznor’s post on the NIN forums. Well, I was recently reading Mashable and found this post about a new startup called SaveFans! (abbreviated SF in following text) which is an offer-based ticket platform. Now if you remember my original post, I quote Trent Reznor as saying:

My guess as to what will eventually happen if / when Live Nation and TicketMaster merges is that they’ll move to an auction or market-based pricing scheme…

At the time, I said this would be a bad thing, and as suggested, with the ticket providers unilaterally setting “market-based” prices, it would indeed be disastrous for fans.

The twist with SF is that buyers are allowed to negotiate with sellers. This, by itself, is not a bad idea on the surface. It is still a possibility true scalpers will use the system and not accept perfectly reasonable offers for tickets they hold.

However, it does give the fans a chance to say what they think about truly usurious and monopolistic pricing. SF is not a panacea. Ticket buyers still need some form of protection against egregious scalping as well as not being stuck with unusable and yet non-transferable tickets. Ticket sellers need some form of protection against scalpers profiting at their expense as a result of an attempt to keep shows affordable for fans.

The only way I see to keep everyone happy is to allow event managers/promoters to opt an event out of SF or similar sites or move to a model where ticket transfers are tightly regulated or simply cannot happen without the express approval of the ticketing agency or the event’s management/promoters. Many event managers/promoters nominally prohibit the resale of tickets above face value; it is a long-standing policy of most venues (at least those in Houston) that resale of tickets on the property of the venue and adjoining parking lots is prohibited, sometimes just resale above face value, sometimes any resale. It should be noted that platforms such as SF can be used for good or evil. They aren’t much different from eBay or Craigslist in this regard. It’s still up to the ticket buyers (fans) to promote responsibility and defend their rights.

I see it as unlikely, here in 2010, that more states/cities will pass anti-scalping legislation. In 1999, the New York Office of the Attorney General released a report on scalping. In that report, several suggestions were made on how to reform the ticketing process, and protecting licensed ticket brokers by raising the premium they are allowed to charge above the listed price (at the time of this report, the greater of $5 or 10%; it’s not clear whether or not the extra fees are included in the amount the 10% is calculated on). It is interesting to note that some of the ticket brokers (and I am deviating a bit from my usual “scalper” terminology here, since this is New York we are talking about, where the types and quantity of ticketed events are vastly different) label their markup as a “service fee” which was not addressed by the applicable law. This, however, should be seen for what it is: an attempt to exploit a legal technicality.

I’m not sure what became of the release of this report. I do know that a decade later, scalping is still a major problem.