New at Reason

|5.10.06 @ 8:41AM|#

Although the agreement is supposed to help prevent obesity, it's unlikely to have a measurable effect on students' weight.

It's about control more than it's about obesity.

MP|5.10.06 @ 8:44AM|#

It's about control more than it's about obesity.

I've never bought into that. Progressives seek to "make things better". Of course, "making things better" requires control, but control is secondary to their goals. Your typical progressive does not seek power for power's sake.

|5.10.06 @ 8:47AM|#

Your typical progressive does not seek power for power's sake.

No one does. Those who seek power do so in order to be able to use it.

Dave W.|5.10.06 @ 8:53AM|#

Despite his reservations, Jacobson said "this voluntary agreement is certainly good enough that CSPI will drop its planned lawsuit against Coca-Cola, PepsiCo, Cadbury Schweppes, and their bottlers." The fact that the agreement was reached under the threat of litigation suggests it was not exactly "voluntary."

Looks like Sullum has been dropping credulity tabs again. What the soda companies did was "voluntary" in every sense of that word. If they are worried about a lawsuit then that is a pretty good indication that the soda companies know some things they haven't shared with us yet. Something secret. Something discoverable. I know this cause I know businesspeople don't negotiate unless there is leverage. And the threat of a lawsuit based on what we know publically is obviously shitty leverage.

So glad GOOGLE saves these conversations. Meet you back at this URL in a couple years, Sullum.

Dave W.|5.10.06 @ 8:58AM|#

It is also worth noting that if soda was a market, rather than a cartel, this agreement would have been a non-starter for a couple reasons, including:

(1) some of the soda competitors would have taken up the law suit challenge; and

(2) the soda wouldn't be so toxic in the first place.

|5.10.06 @ 9:01AM|#

I know this cause I know businesspeople don't negotiate unless there is leverage. And the threat of a lawsuit based on what we know publically is obviously shitty leverage.

The makers of silicone implants will be greatly relieved to hear this.

|5.10.06 @ 9:01AM|#

Something secret. Something discoverable.

Something dark and fiendish. Something evil. Something so evil that if we were to even have an inkling of what it was, it would drive us completely insane.

MP|5.10.06 @ 9:04AM|#

And the threat of a lawsuit based on what we know publically is obviously shitty leverage.

I call bullshit. Litigation can be very expensive, in terms of both monetary and PR costs, regardless of the validity of the case. And considering the pliability of juries, what may be obvious to most of us is apparently not always obvious to the dopes on the jury.

And you are well aware of all this Dave, and yet you insist on continuing to make your ridiculous "they must be hiding something" argument.

|5.10.06 @ 9:07AM|#

Do commenters like Dave get paid by the confoundedness of their posts?

|5.10.06 @ 9:09AM|#

And the threat of a lawsuit based on what we know publically is obviously shitty leverage.

I wouldn't be so sure of that, Dave. Sometimes the penalty if you lose(even if you believe you're innocent) is sufficiently great to make people settle, especially in a circumstance like this where they aren't losing much.

|5.10.06 @ 9:09AM|#

Either way, it's all about choice. Neither Dave, Clinton, or the C"Science"PI have any fucking say in what I, or my kids, choose to consume.

|5.10.06 @ 9:21AM|#

How is the soft drink market a cartel?

As I understand it there are no barriers to entry, and lots of low-cost substitutes exist.

There is no government collusion, and further there is vigorous and continuous competition between the major players in the market.

|5.10.06 @ 9:21AM|#

... who needs vending machines in school anyway? Didn't the whole trend start in the nineties as just another revenue stream for Coke et al.? In my lunch period, I had the choice of milk, and... another kind of milk. And it was good enough for us!

Dave W.|5.10.06 @ 9:23AM|#

I call bullshit. Litigation can be very expensive, in terms of both monetary and PR costs, regardless of the validity of the case. And considering the pliability of juries, what may be obvious to most of us is apparently not always obvious to the dopes on the jury.

Name me one famous company destroyed by consumer safety litigation. The only two that come to my mind are Exxon (not completely destroyed, but hurt significantly) and Arthur Andersen. Neither of these companies was innocent.

There seem to be a lot more crocodile tears about innocent companies being destroyed than companies actually getting destroyed. Don't you know when you are getting played?

btw, last time I checked, McDonald's seemed to be in stable condition. For all Cessna's bitching, they lose US lawsuits and still seem to be doing okay too. Gun shortage hasn't materialized yet either.

I understand the narrative of the innocent company getting smashed by unfair tort liability. Never have been able to track down the any cases on this important point, tho.

Dave W.|5.10.06 @ 9:26AM|#

I see that someone brought up silicone implants. I have to admit that I never followed that one too closely. Was that a bullshit health scare or a real one? I have no idea, although I do seem to recall that that one was resolved by administrative action rather than judicial.

My question is sincere: are silicone implants reasonably safe (that is, safe as other types of cosmetic surgery)?

MP|5.10.06 @ 9:26AM|#

Name me one famous company destroyed by consumer safety litigation.

Why is "destroyed" the relevant criteria? The criteria should be simply "burdened with unjust costs".

|5.10.06 @ 9:28AM|#

destroyed

WTF? Who said anything about companies being destroyed? Coke doesn't have to be facing destruction to be willing to make a deal, just a PR hit.

Timothy|5.10.06 @ 9:33AM|#

Name me one famous company destroyed by consumer safety litigation.

Dude, DOW CORNING.

Thomas Paine's Goiter|5.10.06 @ 9:33AM|#

Do commenters like Dave get paid by the confoundedness of their posts?

No, their payment is the glee that they get from trolling the boards.

Dave W.|5.10.06 @ 9:41AM|#

To follow up on my question, it looks to me like Dow Corning was destroyed (well, 9 years of bankrutcy) by unmeritorious tort litigation:

http://en.wikipedia.org/wiki/Dow_Corning

I still feel that unfair tort liability and litigation is way more of a "bogeyman" for the pro-business crowd than a real threat, but the silicone case is an eye opener and does give some credence to the fears expressed on this thread.

In the silicone case, they did the settlement in 1998, but figured out that silicone implants were safe in 1999. Does anyone know how that happened? It sure would have been nice if the independent study had been completed before Dow felt it had to settle. Was this a case of a bad judge pressuring for a resolution when the neccessary data was only a year away? Did Dow settle because of discovery deadlines or because the jury was already deliberating? Does anyone know that?

Dave W.|5.10.06 @ 9:42AM|#

sorry about shortening Dow Corning to "Dow." Careless mistake.

|5.10.06 @ 9:43AM|#

Name me one famous company destroyed by consumer safety litigation.

Corvair.

|5.10.06 @ 9:48AM|#

Well, in my days as a senior counsel with a Fortune 100 company, let's just say that reputation risk was arguably our single biggest concern. We'd settle in situations where we were 100% correct and the ghost of Socrates was nodding his head at our righteousness, but resulting negative publicity was deemed to be too great of a threat to risk a fight. What people get up in arms about or take as a negative is quite frequently irrational and has nothing to do with whether you've got some evil shenanigans going on in a back room.

I'm enjoying a refreshing Coca-Cola right now. Ah, tasty. Though I do miss Coke with sugar--that was the best.

Dave W.|5.10.06 @ 9:56AM|#

Re: Corvair

Corvair wasn't a company, the Corvair model wasn't withdrawn due to tort judgments, and Chevrolet wasn't destroyed.

Refreshing my memory on Corvair this morning, I can see why the advocacy group chose someone as investigation-proof as Bill Clinton to be the spokesperson.

|5.10.06 @ 9:57AM|#

What Pro said.

(Pro, you must be a Southron, drinking Coke at 9:55 am EDT.)

Dave W.|5.10.06 @ 10:02AM|#

Well, in my days as a senior counsel with a Fortune 100 company, let's just say that reputation risk was arguably our single biggest concern. We'd settle in situations where we were 100% correct and the ghost of Socrates was nodding his head at our righteousness, but resulting negative publicity was deemed to be too great of a threat to risk a fight.

In other words, the verdicts are not the fear of verdicts but fear of private individuals, acting in their capacity as freemarket customers, that was the concern. Frankly, PL, that sounds like a problem between your client and its irrational customers than an appropriate concern for the judicial or administrative branches. I hope your client and its nodding Socrates never tried to blame the stupid customers problems on the courts or juries, because false PR does not help in the longrun, rather, it hurts. And it is not fair.

Do agree with you about cane Coke, tho. Funny how the HFCS is exactly bioequivalent to old fashioned with respect to every organ except our tongues.

Dave W.|5.10.06 @ 10:04AM|#

--oldfashioned cane--

|5.10.06 @ 10:07AM|#

Michael:

Not that I really mean to side with Dave W. here---that's the last thing any rational person would ever do---but, to be fair, would you not agree that leaking a deadly gas into the passenger compartment might be something that warranted a lawsuit?

-------------------

Dave W.:

You asked for evidence; you got it. Yet, you still want to qualify that evidence, you still refuse to budge. Could it be that your ideology is driving your thinking, rather than the facts at hand?

-------------------

Pro Liberace:

You can thank government corn subsidies for that High Fructose Corn Syrup sludge. But I'm sure Dave W. has some excuse for that too.

"We'd settle in situations where we were 100% correct and the ghost of Socrates was nodding his head at our righteousness, but resulting negative publicity was deemed to be too great of a threat to risk a fight."

Exactly.

|5.10.06 @ 10:10AM|#

There are some excellent boutique sodas with cane sugar around these days. Pure nectar!

|5.10.06 @ 10:11AM|#

Real Bill:

But, but...what about the SODA CARTEL?!?!?!?!

Dave W.|5.10.06 @ 10:14AM|#

still want to qualify that evidence, you still refuse to budge

I acknowledged the evidence and admitted that it has some force. It still isn't the whole picture. In trying to evaluate exactly how bad this piece of evidence is for my positin here, I had a very specific question:

Where was the litigation at when Dow Corning settled? Discovery deadlines or was the jury deliberating?

What is the answer to that, Evan? Cause it ain't in my WIKI.

Timothy|5.10.06 @ 10:14AM|#

www.sodapopstop.com if you want to order them. The shipping is a pain, though.

PL: I find Dr. Pepper to be a better breakfast beverage thank Coke.

|5.10.06 @ 10:17AM|#

Well, Dave, I'm not blaming the legal system (well, maybe I am a wee bit). I'm just saying that a corporation may quite rationally bend the knee to popular perception to avoid damage to its reputation. Not that companies won't fight the good fight when their core business is threatened. The whole obesity mess is one that the soda industry would like to avoid, that's for sure. I think they're thinking about the beer industry's strategy of sounding all proactive (message commercials, nonprofit activities, etc.) while still selling their product in mass quantities. While I have little opinion about the corn syrup menace, my Coke-with-sugar experience in Malaysia definitely convinced me that the taste is quite different.

Why yes, jp, I am a southerner. My great-grandfather was among the first to sell Coke in the bottle at his general store, so Coke and I have a long history :)

Dave W.|5.10.06 @ 10:18AM|#

There are some excellent boutique sodas with cane sugar around these days. Pure nectar!

Yes, and now these cane machines will have a much better shot at getting into the schools because they are not parties to the agreement, which is really cool. Sometimes it takes a village to bring down a cartel. As they used to say on the A-Team: I luv it when a plan comes together. Go, Clinton! Its yer birthday! Go, Clinton!

|5.10.06 @ 10:19AM|#

Cartel... I don't think so.

Do Coca-Cola and PepsiCo have near monopoly power... Yes. (At least that's what many economists think.)

(Is it weird to reply to a joke post with a serious one?)

MP|5.10.06 @ 10:24AM|#

Do Coca-Cola and PepsiCo have near monopoly power... Yes. (At least that's what many economists think.)

Those economists are wrong.

|5.10.06 @ 10:25AM|#

I was pissed 25 years ago when my high school cafeteria took caffienated drinks out of the vending machines, leaving shit like Sprite and Orange Crush. Thank God we had open lunch and I could walk two blocks to the QuikTrip to get a half-gallon fountain Coke.

|5.10.06 @ 10:26AM|#

The issue isn't whether businesses should not be sued for negligence or intentional wrongdoing that proximately causes harm. Of course they should. The problem is that the threat of litigation, the real threat of astronomical awards against business defendants and the damage to their reputation and good will that can result from this process is entirely disproportionate to the empirically demonstrable harm some of these companies have caused.

The prevailing notion, exemplified by several of Dave W's comments, that many businesses probably harbor some deep, dark secrets about the harm they are doing, else why would they settle in the face of expensive and risky litigation, is simply absurd. Hell, even the deep, dark secret that tobacco is bad for you was common public knowledge by the '60s. Businesses exist to make profit. Threats to that profit will be analyzed by looking at the potential magnitude of the harm of litigation weighed against the likelihood the plaintiffs will prevail. Given the current state of tort law, the answers are all too often (1) too damned much and (2) too damned high. Thus, the only rational business decision is to seek to compromise as long as possible when faced with such threats.

MP|5.10.06 @ 10:26AM|#

To elaborate further, to have monopoly power, you have to be able to exercise it. Can Coke double the price of their soda at will? Can Pepsi? No. Store brands and small competitors would eat them alive.

Dave W.|5.10.06 @ 10:27AM|#

I'm not blaming the legal system

I do blame the legal system for some things. If this were a consumerist board, I would be fighting every bit as hard against them as I am against you guys.

To put forward one criticism of the tort system that PL and other lawyers could understand:

Something like the Pinto memo should be evidence on the issues of causation in a negligence regime, nexus in a strict liability regime) and compensatory damages. However, any jury deciding punitives should not even be allowed to hear about something like the Pinto memo on FRE 403 grounds.

In fact, I am not that hot on punitive altogether. I have extremely different feelings about compensatory (generally pro) and punitive damages (generally con).

Timothy|5.10.06 @ 10:28AM|#

Dave W.: You're purportedly an attorney, learn to use Findlaw, jackass.

|5.10.06 @ 10:29AM|#

It's about control more than it's about obesity. It is a little early for my tinfoil hat. Even for this site.

|5.10.06 @ 10:34AM|#

Evian, Big Corn is truly an amazing power. It's impaired the quality of soft drinks and has forced its way into our gas tanks. And, and, I can't stop eating it--corn bread, grits, popcorn, even. . .corn!

Timothy, Dr. Pepper is not my cup of tea, though it does explode nicely when shaken up.

I do wonder why the soda industry isn't more wide open. Is it economies of scale? Is it because there are basically three companies that got big really early on and can gobble up any upstarts (don't forget Cadbury Schweppes!!)? I was thinking that R.C. Cola (my alternative during the dark days of New Coke) was still independent, but it appears that it was assimiliated by Schweppes in 2000.

Dave W.|5.10.06 @ 10:34AM|#

Okay. I used Findlaw. It said that Dow Corning settled because it was hiding documents that put the company in a bad light, and not because they were worried about a jury verdict.

Thanks for the tip, Jackass.

Happy to be vindicated.

|5.10.06 @ 10:37AM|#

Dave, my feeling about punitives is that they shouldn't go to the attorney or to the plaintiff(s). Of course, I also don't want the government to get them, either, so I'm not sure where they should go. Without punitives, though, bad actors can make some nasty cost-benefit decisions.

|5.10.06 @ 10:38AM|#

Wealthy bad actors, that is.

Dave W.|5.10.06 @ 10:40AM|#

btw, for libel purposes, i will reveal that my post about Findlaw was sarcastic. Findlaw does not have the answer to the question I posed about Dow Corning upthread. I just wanted to throw a 10 minute scare into Jackass.

Dave W.|5.10.06 @ 10:44AM|#

Dave, my feeling about punitives is that they shouldn't go to the attorney or to the plaintiff(s). Of course, I also don't want the government to get them, either, so I'm not sure where they should go. Without punitives, though, bad actors can make some nasty cost-benefit decisions.

Part of the reason I got kicked off of DU is that I suggested that expanded injunctive remedies could displace punitives. Something along the lines of having the court appoint the company's directors for a few years so the company can learn to appoint more vigilant directors by observing how the court does it. Supermax (with a public video feed) if the CEO is still alive.

The main reason I kicked of DU is that I suggested that Roe v. Wade permits heavy regulation of 3d trimester abortions.

Some boards can be so cruel.

R C Dean|5.10.06 @ 10:46AM|#

Your typical progressive does not seek power for power's sake.

The hypothesis proposed, then, is that progressives seek power in order to achieve certain defined goals.

We can test this hypothesis by seeing how many "progressive" government programs are repealed once they have achieved their original goals.

Any nominees? I can't think of a single one.

Dave W.|5.10.06 @ 10:49AM|#

Another idea is to automatically bifurcate compensatory and punitive phases, even to the extent of empanelling completely different juries. When billions are at stake, this doesn't seem like too much process.

I hope you guys can see that there is at least some balance in my perspective on these issues.

However, that doesn't undercut my basic point that PepsiCoke is obviously hiding something big here in this particular case.

|5.10.06 @ 10:50AM|#

Corvair wasn't a company, the Corvair model wasn't withdrawn due to tort judgments, and Chevrolet wasn't destroyed.

That's wrong. Corvair was tied to Chevrolet, but it didn't share any production or driveline components with Chevrolet models and was therefore considered it's own entity. You'll notice that no Chevrolet emblems were ever affixed to any Corvairs. It was to Chevrolet what the Geo was to Chevrolet.

|5.10.06 @ 11:04AM|#

I can't say I agree with Dave W., yet I can say I disagree with something else in these comments.

1. This was NOT a government action. Unless someone out there thinks billy boy is still pres? Although I do still know people who tell me that everything happening now in government is Bills fault.

2. I'm thinking about free-markets and the varying types of "currency". Specifically, I'm thinking about Cory Doctrows excellent treatment of potential "reputation markets" in "Down and out in the magic kingdom". One of the interesting thing about the posters who are arguening against Dave W. (and I am assuming against Litigation), is that apparently reputation should not be subject to the free-market. For instance, I know an economist from Brazil, a big fan of Irving Kristol, who views Coca-Cola as having a very nasty rep in SA due to its risking its reputation over some very mysterious deaths relating to unionaztion. Isn't reputation a part of the free-market?

Now, on the issue on corn syrup soda in schools?

Who cares. Really. If this were a "government" action, like republican enforced drug testing of non-suspect children, I would totally be there.

But this? Unless someone can show me the government force used? And I'm sorry, but "threat" of litagtion is not enough. I'm threatened by litagation every day I walk out my door into the Neo-facist police nation we are creating daily, as we worry about free enitties entereing into free contracts and free agreements. Maybe the soda companies are stupid to have agreed. But agree they did.

I don't much like broad, one size fits all solutions, and I think this is stupid for that reason, but I am conserned with actual coercion in our schools, so if someone is suspended for bringing soda into school, count me in on the outrage.

Protecting ones reputation is usually only considered blackmail under certain very specific levels, and this just doesn't make it.

|5.10.06 @ 11:06AM|#

I find this "cartel" talk fascinating and ridiculous. Maybe it is because of where I am.

In New York City, where I live, and Northern New Jersey, where I grew up and visit, one finds almost innumerable competitors to Coke and Pepsi. In a grocery store there are dozens of different soft drinks, and there are also the iced teas and juices and energy drinks that, I assume, compete with the soft drinks. Every month or so I think I find a new Snapple knock off in the store, and new versions of Coke and Pepsi and Dr. Pepper (lime, vanilla, cherry, that bizarre coffee version of Coke, etc.) It seems to me that the market for drinks is a vibrant one.

Maybe outside a major city this is not the case.

|5.10.06 @ 11:11AM|#

We can test this hypothesis by seeing how many "progressive" government programs are repealed once they have achieved their original goals.

I guess you wouldn't count the U.S.S.R. breaking up after perfect communism and the worker's paradise was created, would you?

Dave W.|5.10.06 @ 11:15AM|#

Learning time, Mitch (and others):

"A cartel is a group of legally independent producers whose goal it is to fix prices, to limit supply and to limit competition. Cartels are prohibited by antitrust laws in most countries; however, they continue to exist nationally and internationally, formally and informally. . . . Cartels usually occur in oligopolies, where there are a small number of sellers."

Next stop: what is oligopoly:

"An oligopoly is a market form in which a market is dominated by a small number of sellers (oligopolists). The word is derived from the Greek for few sellers. Because there are few participants in this type of market, each oligopolist is aware of the actions of the others. Oligopolistic markets are characterised by interactivity. The decisions of one firm influence, and are influenced by, the decisions of other firms. Strategic planning by oligopolists always involves taking into account the likely responses of the other market participants. An oligopoly is a form of economy. As a quantitative description of oligopoly, the four-firm concentration ratio is often utilized. This measure expresses the market share of the four largest firms in an industry as a percentage. Using this measure, an oligopoly is defined as a market in which the four-firm concentration ratio is above 40%."

The fact that a few people can sit in a room and effectively get all the soda machines out of all the schools in a nation as big as the US is heavy evidence of a cartel.

|5.10.06 @ 11:16AM|#

I actually agree with RC DEAN!!!

Well only sort of. Those who seek power tend to like to keep it. Wheter or not they are "progressive" of "conservative".

Just like all those "progressives" who wanted to do away with the sunset clauses in the Patriot Act.

Those weren't progressives you say? Surely you jest, conservatives would never want to expand government power unconditionally!

Lets see, the president who started the "drug war" surely most have been progressive. Reagan? Oh he must have been a progressive, surely you can't tell me he was conservative?

|5.10.06 @ 11:21AM|#

Pro Liberate @ 10:37,

One solution would be to destroy money in the amount of the punitive damages. In other words nobody gets it, but the company does lose it.

|5.10.06 @ 11:28AM|#

Dave:

"However, that doesn't undercut my basic point that PepsiCoke is obviously hiding something big here in this particular case."

Your basic point is undercut pretty succinctly and effectively by the fact that was illustrated above, by another poster: that irrational, kneejerk overreactionist consumers are swayed heavily by huge court verdicts and awards----even if the verdict is stupid and they all agree it is. In this instance, we all know that the empty HFCS calories in sodas contribute to weight and health problems in kids if they drink enough of it. While this is not the fault of the soda companies---nobody's forcing anyone to drink their product---if an idiot jury came along and found them "guilty" of contributing to childhood obesity, those irrational consumers would see "Coke/Pepsi loses childhood obesity case, is forced to pay out billions" scrolling across the news ticker on Headline News, and assume that the verdict was handed down because of some kind of actual fault on Coke/Pepsi's part, which would undoubtedly affect their buying decisions in the future. Which is not what Coke/Pepsi wants.

The fact that a company settles in no way proves that they have some big dark evil secret to hide from the public. Often, it's the public's propensity to equate negative verdicts with some kind of negative actions, even if none truly exist, that is the reality of the situation.

As such, we don't have to DISprove your point, Dave---you have to PROVE it to us. So far, all you've been able to do is make wild guesses based on zero fact.

In other words, your "argument" is "undercut" by the simple fact that you have no evidence to support it. ShaZAM!

|5.10.06 @ 11:32AM|#

Dave W.,

I'm not convinced the prices are fixed. Maybe I will look when I go to lunch today, but I am pretty sure there is a diversity of prices between different drinks in the same store, and between the same drinks in different stores, and between the same drinks in the same store over time (there are often sales on Coke and Pepsi products.) Or are you asserting that the fixing takes place at the wholesale level and is not reflected in retail prices?

As for that oligopoly talk, am I supposed to think there is something sinister about the fact that "...the decisions of one firm influence, and are influenced by, the decisions of other firms..." and that "...strategic planning by oligopolists always involves taking into account the likely responses of the other market participants..."?

|5.10.06 @ 11:32AM|#

Mitch,

No, it's the same here in smalltown Charlottesville. Yes, Coke & Pepsi products are the big sellers, but there are TONS of competitors...especially in a "progressive" town like C-Ville, where there's alot of dirt-worshippers who think that the sugar in some specialty organic fruit drink is better for them than the sweetener in Pepsi.

|5.10.06 @ 11:33AM|#

Mitch, I don't exactly agree with Dave on the "cartel" issue, though I do see some oligopolistic tendencies in the soft drink industry. However, your example of Snapple won't fly, because Snapple was acquired by Cadbury Schweppes. Which also owns 7-Up and Dr. Pepper, I believe.

We have lots of soft drink competition down here, too, but I think Dave's point is that the competition (where it isn't actually one of the Big Boys in alternative form) is so small compared to the Big Three as to be irrelevant, in practical terms.

|5.10.06 @ 11:38AM|#

Corvair wasn't a company...

That's wrong ... was therefore considered it's own entity. ... no Chevrolet emblems were ever affixed to any Corvairs

Bzzzt. Corvair was Chevrolet through and through. Marketed, sold and serviced by Chevy. There wasn't much external Chevy badging, but there was a bowtie on the steering wheel, and the VIN plates read "Chevrolet".

GM at one point prepared versions of the Corvair for Pontiac and Buick, each with their own name. If it had been a separate brand, separate names wouldn't have been necessary.

MP|5.10.06 @ 11:38AM|#

small compared to the Big Three as to be irrelevant, in practical terms.

From a cartel/oligopoly/monopoly perspective, it is only irrelevant if they can wield this "awesome" power to the detriment of consumers. They simply can't. Larger firms own the majority of the soda market due to economies of scale which allow them to keep prices low. And clearly, low prices are not detrimental to consumers. If any of these firms tried to raise prices, they would be swept away by the competition.

Dave W.|5.10.06 @ 11:42AM|#

As such, we don't have to DISprove your point, Dave---you have to PROVE it to us. So far, all you've been able to do is make wild guesses based on zero fact.

Sullum is complaining. I am fine with what the Coke executives and Bill Clinton agreed to. Coke gets to keep hiding its stuf a bit longer and the HFCS machines come out of the schools. I am cool with how this went down. I am just trying to help the crybabies understand what the quid pro quo was for Schweppes, Pepsi and Coke here.

The schools are still open for smaller competitors, without the reputational and punitive concerns of the big players, to waltz in and sweep up this profitable market niche. I wonder whether the multitude of Snapple knockoffs that are stuck in Northern Jersey will avail themselves of this nationwide opportunity. Without a reputation or substantial accrued assets, what have they got to lose?

Dave W.|5.10.06 @ 11:50AM|#

As for that oligopoly talk, am I supposed to think there is something sinister . . .

Unfortunately, no one can be told what the Matrix is. You have to see it for yourself.

|5.10.06 @ 11:58AM|#

"Sullum is complaining. I am fine with what the Coke executives and Bill Clinton agreed to. Coke gets to keep hiding its stuf a bit longer and the HFCS machines come out of the schools. I am cool with how this went down. I am just trying to help the crybabies understand what the quid pro quo was for Schweppes, Pepsi and Coke here."

Hmm, yes, that odd, disjointed, make-a-no-sense paragraph is sure to clear things up, Dave. What "secret stuf" [sic] are you referring to? What exactly was the "quid pro quo" for these companies? If that was your stated goal, you've done a damned poor job of it.

"The schools are still open for smaller competitors, without the reputational and punitive concerns of the big players, to waltz in and sweep up this profitable market niche."

So this is all about protectionism, not health, for you? You couldn't care less about the kids drinking HFCS-water, you just want to make sure that the big evil corporations are prohibited from competing by The State. An even more honorable position...right up there with Lou "theytukerjobs!" Dobbs. Yes, state intervention in the market is fun!

At least your honest in your worship of a state-managed centralized economy. Do you also get worked into a furious lather over Wal*Mart?

|5.10.06 @ 12:01PM|#

"Sullum is complaining. I am fine with what the Coke executives and Bill Clinton agreed to. Coke gets to keep hiding its stuf a bit longer and the HFCS machines come out of the schools. I am cool with how this went down. I am just trying to help the crybabies understand what the quid pro quo was for Schweppes, Pepsi and Coke here."

Hmm, yes, that odd, disjointed, make-a-no-sense paragraph is sure to clear things up, Dave. What "secret stuf" [sic] are you referring to? What exactly was the "quid pro quo" for these companies? If that was your stated goal, you've done a damned poor job of it.

"The schools are still open for smaller competitors, without the reputational and punitive concerns of the big players, to waltz in and sweep up this profitable market niche."

So this is all about protectionism, not health, for you? You couldn't care less about the kids drinking HFCS-water, you just want to make sure that the big evil corporations are prohibited from competing by The State. An even more honorable position...right up there with Lou "theytukerjobs!" Dobbs. Yes, state intervention in the market is fun!

At least your honest in your worship of a state-managed centralized economy. Do you also get worked into a furious lather over Wal*Mart?

Anyway, I realize that you're cool with using threats of litigation to force the hand of companies which you personally dislike. But that doesn't mean that your argument holds any more weight than it would otherwise---and it doesn't mean that you can obfuscate your way out of the matter at hand: namely, your "argument" that Big Soda has deep dark secrets that it is hiding...an argument which you STILL have yet to substantiate with anything other than baseless accusations. I'm still waiting.

|5.10.06 @ 12:05PM|#

Sorry, hit "post" too early, by accident.

'Unfortunately, no one can be told what the Matrix is. You have to see it for yourself.'

Is this your pansy-assed way of admitting defeat, Dave? "Uh, I don't really have any evidence to back up my assertions, so, um, I'll trot out some cliched movie quote...yeah, that'll shut 'em up..."

Dave W.|5.10.06 @ 1:02PM|#

"The schools are still open for smaller competitors, without the reputational and punitive concerns of the big players, to waltz in and sweep up this profitable market niche."

So this is all about protectionism, not health, for you? You couldn't care less about the kids drinking HFCS-water, you just want to make sure that the big evil corporations are prohibited from competing by The State.

Either non-signatory soda companies are going to end up putting soda machines in the school or they are not.

1st Poss: If they do, then the soda market will become more balanced between big and small competitors and it will behave less like a cartel. This is a good outcome.

2d Poss: If they don't, then it means kids will consume less HFCS and maybe even less sugar, too.

It is win-win. Don't have a solid prediction for which good outcome we will experience. My best guess is somewhere in between, but closer to the 2d Poss: the "market" will stay as lopsided as it is, but the soda will be out of the schools. Either way is fine with me though.

|5.10.06 @ 1:15PM|#

Dave,

From a strictly quantitative something like 4 firm concentration or the HHI is useful in determining if an oligopoly or monopoly may exist, or it could even be the definition if you wish.

But putting aside the huge inherent problems in even defining or calculating such a number.

The more relevant question from an economic standpoint is do those firms have pricing power, and even more important can those firms exclude competitors.

One might imagine lots of circumstances where one firm dominates an industry simply because it has a superior product.

The problem only arises when the firm holds the favored position within an industry through collusion with the government, or has some other illegal means of barring other firms from entering and competing in the market. Mafia owned garbage businesses that threaten physical harm if competitors enter.

In the arena of soft drinks, or caffeinated beverages, or sweetened drinks or whatever, it seems clear to me that their are no significant barrier to entry. This is well illustrated by the huge variety of options I have whenever I walk to the convenience store.

|5.10.06 @ 2:13PM|#

Dave,

From a strictly quantitative something like 4 firm concentration or the HHI is useful in determining if an oligopoly or monopoly may exist, or it could even be the definition if you wish.

But putting aside the huge inherent problems in even defining or calculating such a number.

The more relevant question from an economic standpoint is do those firms have pricing power, and even more important can those firms exclude competitors.

One might imagine lots of circumstances where one firm dominates an industry simply because it has a superior product.

The problem only arises when the firm holds the favored position within an industry through collusion with the government, or has some other illegal means of barring other firms from entering and competing in the market. Mafia owned garbage businesses that threaten physical harm if competitors enter.

In the arena of soft drinks, or caffeinated beverages, or sweetened drinks or whatever, it seems clear to me that their are no significant barrier to entry. This is well illustrated by the huge variety of options I have whenever I walk to the convenience store.

Dave W.|5.10.06 @ 2:27PM|#

This is well illustrated by the huge variety of options I have whenever I walk to the convenience store.

Next time you go in, check how many cane sweetened drinks you can find.

My success rate on this seems to be only about 10%, which is too bad because I am willing to pay a premium. The tacquerias in the Mission seemed to understand that. Y can't 7-11?

MP|5.10.06 @ 2:32PM|#

Next time you go in, check how many cane sweetened drinks you can find.

For the zillionth time...corn is subsized and sugar has price supports. It is the US ag policy that creates a perversion towards HFCS, not some dark oligopic conspiracy.

And 7-11 has limited shelf space and caters to price sensitive (and not culturally sensitive) consumers.

|5.10.06 @ 4:21PM|#

Dave,

Try shopping at a retailer that caters to consumers like yourself (willing to pay a premium). Say, Trader Joe's or Whole foods. You'll find an impresive variety of cane sweetetened drinks, but for the fun of it, try finding any product produced by Coke/Pepsi/Schwepps and get back to me on your success rate. (I'm thinking along the lines of 0%)

|5.10.06 @ 4:22PM|#

There was a thread hijacked long ago to discuss the superiority (taste-wise, that is) of sugar-sweetened Coke over the corn syrup variety. I think it was started by someone mentioning the sale of the Mexican (sugar) version in the Southwest. I had a sugar version in Kuala Lumpur back in 1997, and it was like a religious experience. Well, okay, maybe not, but it tasted a lot better than what I've been getting here.

For any Coca-Cola executives, yes, I'd pay a small premium for sugar-sweetened Coke. And it would make Dave so happy, too :)

Dave W.|5.10.06 @ 5:09PM|#

For the zillionth time...corn is subsized and sugar has price supports. It is the US ag policy that creates a perversion towards HFCS, not some dark oligopic conspiracy.

No. For the zillionth and oneth time...corn is subsized and sugar has price supports. It is the US ag policy that creates a perversion towards HFCS, and some dark oligopic conspiracy is what causes these price supports to continue.

Side note to PL: My original version of that response had a snarky reference to you paying premiums. The server squirrels ate that presumptuous draft thankfully.

Dave W.|5.10.06 @ 5:18PM|#

More to PL:

- I don't think Coke will offer a parallel product. even if they have no reason to suspect some kind of dramatic health risk in one of these products relative to the other, there is no way they would take the risk of running parallel products simultaneously such that an unheretofore known risk might manifest itself. This is a business risk to large to take.

- I do think that Coke is gradually switching to cane. The ingredient labels read differently than they did 5 years ago and I see sucrose after fructose now. Might be a mere difference in labelling, but my spidey sense tells me that Coke can control the sucrose proportion and is probably doing the following things: (1) upping the sucrose; (2) getting Congress to adjust the price support system so that it is economical to up the sucrose; and (3) hoping in the meantime that only lunatics figure out what is going on. That is what I'd be doing if I were Coke.

Dave W.|5.10.06 @ 5:23PM|#

should be:

--upping the sucrose %gradually--

--adjusting the price support and subsidy system gradually--

gradually is pretty key here. otherwise evidence of any elevated health risks might manifest.

Dave W.|5.10.06 @ 5:25PM|#

ya know what's real nice with cane?

fountain pepsi. Only takes about 3 fingers, too.

Robert|5.10.06 @ 5:54PM|#

I can't taste the dif between Passover Coke and HFCS Coke, and I'm a big fan of Coke.

But you want cartels, check out bottled WATER. Some years ago (no need to go into the reason) I was checking out the companies in the Yellow Pages. Of Great Bear, Deer Park, and Poland Spring, two of the phone numbers differed only in their final digit, and the other one's ad looked just like one of the others. And when I phoned, the lady answered, "Perrier."

|5.10.06 @ 6:04PM|#

Robert, I think Perrier owns a river here in Central Florida.

Dave W.|5.10.06 @ 6:31PM|#

Robert, I think Perrier owns a river here in Central Florida.

Unfortunately, no one can be told what the Matrix is. You have to see it for yourself.

Lazlo|5.10.06 @ 6:59PM|#

For any Coca-Cola executives, yes, I'd pay a small premium for sugar-sweetened Coke.

Not gonna happen. Rolling out "Coke with Actual Sugar[TM]!" would start a lot of people wondering just what the hell was in all the Cokes they drank over the last twenty years or so, if it wasn't sugar.

And just to drag in a little more free-market relevance: since 2002, Mexican bottlers' continued use of sucrose has been supported by a 20% tax imposed on soft drinks sweetened with anything other than cane sugar. The WTO struck that tax down on appeal a couple of months ago, so you can look forward to green glass bottles of HFCS-sweetened pseudoCoke at your local taqueria in due course.

Fortunately I noticed yesterday that my favorite newsstand has added li'l 8 oz. Dublin Dr. Peppers to the Stewart's, Afri-Cola, Boylan's, Jolt, and other assorted small-label bottled sodas in their cooler.

Dave W.|5.10.06 @ 7:50PM|#

Stewart's ain't small label.

Boylan's Cane Cola sounds like an intriguing product. Wish I had seen it in my lifetime of shopping, but, alas, no.

|5.10.06 @ 9:18PM|#

N - E - S - T - L - E - S, Nestlè's makes the very best. . .waaateeer.

Okay, I looked it up. Nestlè owns Perrier, which bought Zephyrhills Water. Perrier thus got pumping rights to Crystal Springs, supposedly to the detriment of the springs. Probably true enough.

Lazlo, there is a marketing angle--just sell it as Mexican Coke with no explanation whatsoever. We in the know will be pleased.

|5.10.06 @ 9:47PM|#

Not to send this train into a firey plummet down the gorge, but what the hell...

Evan:
Not that I really mean to side with Dave W. here---that's the last thing any rational person would ever do---but, to be fair, would you not agree that leaking a deadly gas into the passenger compartment might be something that warranted a lawsuit?

That isn't what I'm arguing. If you're as much into anything featuring internal combustion as I am, you'll know that one aftermarket feature of the wildly popular VW bug has always been a bolt-on heating system which is normally lacking in vehicles with air cooled engines for obvious reasons. Any idiot can tell you that putting a shroud over an exhaust manifold and directing the potentially carbon monoxide laced warmth to the passenger compartment isn't necessarily a great idea. Back in the sixties it might have been good litigation fodder, but that was just the technology of the time which GM was just beginning to experiment with. Hey - why try something for the first time, right?

Doctor Duck:
Bzzzt. Corvair was Chevrolet through and through. Marketed, sold and serviced by Chevy. There wasn't much external Chevy badging, but there was a bowtie on the steering wheel, and the VIN plates read "Chevrolet".
GM at one point prepared versions of the Corvair for Pontiac and Buick, each with their own name. If it had been a separate brand, separate names wouldn't have been necessary.

Lay off your buzzer for a moment and read the second paragraph of what I posted. Corvair had its own model vehicles. Have you ever heard of anyone refer to their car as a Chevy Corvair Greenbriar or Chevy Corvair Monza? It wasn't necessarily an arm of GM as it was an arm of Chevrolet, yet was still a separate entity. Had it survived a few more years it very well would have evolved into it's own division altogether. Do you think that GM would have just launched a stand-alone line of miniscule fuel savers at a time of petroleum plenty without keeping it under an already successful wing for a certain period of time?

We now return to your regularly scheduled debate regarding soda pop at lunch time.

|5.10.06 @ 10:13PM|#

You can thank government corn subsidies for that High Fructose Corn Syrup sludge.

Close, but not quite. You have sugar subsidies to thank for that result. It is the high minimum sugar price created by the subsidies that makes HFCS "economic". Archer Daniels Midland, one of the largest corn products producers in the country, spends millions lobbying for increasing sugar subsidies (which would allow it to raise the price for HFCS).

|5.11.06 @ 1:18AM|#

Bob Smith,
You fail to realize that the sugar/corn subsidies/price supports/tariffs/gov't fuckery, etc. are all the master plan of Coke/Pepsi. Duh!

Coke/Pepsi have been playing ADM, ConAgra & the goverernment like puppets for the past 30+ years!
It's the Illuminati, Free Masons, Zionist... uh...I think I've said to much

|5.11.06 @ 10:04AM|#

Lay off your buzzer for a moment and read the second paragraph of what I posted

What second paragraph is that? As far as I can see you posted just one...?

If you mean the sentence where you compared Corvair to Geo, that's not an apt analogy, since Geo started life as a product of NUMMI, not GM. And it too is now firmly part of the Chevy brand.

Corvair was never a 'separate company', which is the point you disputed. At most it could have become a separate brand. But there were never any Corvair stores or Geo stores the way there are, say, Saturn stores.

And while it's true that no one ever said "Chevy Corvair Monza" (too clumsy), plenty of people did refer to those models as the Chevy Monza and Chevy Greenbriar, partly because of the Corvair stigma.

The naming analogy is closer to "Ford Mustang". That's rarely seen, because Mustang has an identity of its own. Yet it is undeniably a Ford. Just because a model is given a separate 'brand identity' or 'brand story' doesn't make it a separate company.

OK, now back to HFCS soda...

Dave W.|5.11.06 @ 10:23AM|#

Corvair was never a 'separate company', which is the point you disputed. At most it could have become a separate brand. But there were never any Corvair stores or Geo stores the way there are, say, Saturn stores.

For present purposes, it would have been most interesting to see whether Corvair was separate from Chevy for liability purposes. I am not sure anybody knows the answer to that, although maybe there were some actual suits back in the 1960s.

Lots of people seem to blame litigation on the demise of the Corvair, but I don't see any evidence of that. Chevrolet may have cited fears of litigation, but, then I really can't imagine Chevy saying:

"The design had some flaws, we fixed them in the mid 60s, between the flaws and the fixes the brand name became poison and we decided to dump it and learn from our mistakes."

Easier to make attacks on private critics (like Nader) and the litigation process. Makes Chevy look less stoopid and more sympathetic. So Chevrolet's spin makes sense. What doesn't make sense is that ppl who should know better fall for such a selfserving, transparent ploy. My spin is: you want me to feel sorry for u Chevy, then u show me the jackpot Corvair verdict(s) that you seem to be suggesting, but never actually citing.

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