Seattle is a city of almost mythic proportions. The home of Starbucks, the Pike Place Market, and The Space Needle. There is fine dining, exciting sports teams, and all in all; a lot to enjoy about this Pacific Northwestern metropolis. But something more sinister lies beneath the surface: Seattle’s expensive coke habit has residents concerned, even outraged.
“The customer — they look at the price and then they don’t even talk to you. They just walk away.”
Other cities, except possibly Philadelphia, don’t have to worry with the high street price for the precious product. Of course, when it’s so readily available, customers have choices. Some have even taken to crossing the border in search of their fix.
The Seattle Coke Problem
Yes, Seattle’s new tax on sugary beverages has raised the prices on many popular beverages, including Coca-Cola. Residents have even started going out of their way to find their preferred products, even if it means making a special trip out of state.
A 2-liter bottle of Coke used to sell in Ahmed Mohammed’s West Seattle market for $2.79. Now, he charges $4; a 43% increase. Making matters worse, a drug store a few hundred feet down the road lies just outside the city limits. “NO SUGAR TAX” is spelled out in bright, big letters on their marquee.
“It’s near impossible for me to sell this now,” Ahmed says. “They go over there, one block away, and there’s no tax.”
It isn’t just Coke, either. Energy drinks, juices, and other sugary beverages are all subject to the new tax law which adds an additional 1.75 cents per ounce on beverages the city deems unhealthy.
The tax is aimed at discouraging the consumption of unhealthy products such as soft drinks. However, residents and business owners are wary of the impact the legislation will have; both on the health of the city as well as the profits of local businesses.
For his part, Ahmed says his business will likely survive as sugary drinks are a small slice of his business. However, other businesses aren’t so sure.
Is It All About Price?
When people have an easy decision to make such as crossing the street to save $1.25 on a bottle of Coke, economists called this “the border effect.” That is, a price disparity marked by a boundary that is easy to cross, such as right across the street.
Residents who reside further towards the city center, for whom a special trip would be a hassle are less likely to make this move. However, if Philadelphia’s soda tax experiment is any indication, the promise of savings on resident’s favorite drinks may be enough to make them look elsewhere.
That people are price sensitive is nothing new. Whether it’s a bottle of coke, a job, or a home; everyone wants a good deal. Perhaps no one is avoiding moving to Seattle because of the sugary beverage tax, however it is one factor to consider.
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