Sunday, November 21, 2010

Real costs of soda and The Soda Tax

     A few days ago it was my father's birthday and as a celebration my family went out to a dinner at Seva's, I ordered a Taco Salad with a bottle of Sprecher's Root Beer. The meal was fantastic with the exception of the cost of the soda. The restaurant charge $3.65 for just a nothin' fancy bottle of Sprecher's! I know that for a restaurant to make money they have to raise the price on things and to the layman Sprecher's is a real fancy independent sort of Root Beer, one that most haven't heard of and such.

     This got me thinking about what is the actual cost of a soda. I've heard before that in a Fast Food place the cup is more expensive than the soda in the cup. I did some research and frankly, I am shocked.

     According to "Eddie on Everything", the cost of making 50,000 cokes worth of concentrate costs the Coca-Cola company $2.60. 2 dollars and 60 cents. For 50,000 cokes. That's $0.000052 a cup. Of course, that's only for the syrup. When you take into consideration everything else in that cup, it ends up at about 13 cents a cup. The sizes used sold for 2.29 or, a 1,761% markup. That is the equivalent of going to the dollar store where everything costs the store 25-75 cents to buy and having the price they sell it at as being in the hundreds. Another example is the new 7.5 tinier cokes that have started to spring up. If you bought a gallon of coke in 7.5 ounce cans, it would cost $8.50. Imagine paying $8.50 for gas!

     The real question is, why is the concentrate so cheap? Well, during the depression farmers were having trouble financially supporting themselves. Obviously, we needed farmers so that we wouldn't all die of famine so what FDR did was start offering farmers money to either not farm some of their fields for a bit, which lowered supply increasing the prices or the government would flat out pay you to farm certain things. Corn is one of those things and one of the things that currently gets the most backing from government. This means that taking corn and making into High Fructose Corn Syrup for sweeting any product made in the USA is way, way more efficient than using Cane sugar or any other type of sweetener. The US Government hands out 50 billion dollars yearly in Corn Subsidies.

    There are different varieties of HFCS, those varieties do not have to be labeled but they range from HFCS-90 to HFCS-42. The number is the percentage of fructose, the extra percent that would add up to 100 is the Glucose. For example, HFCS-90 is 90% fructose, 10% glucose. The higher the fructose, the sweeter. HFCS-55 is as sweet as sugar.
For additional information on this subject, this is a great article.

    Even though it hurts the flavor of their sodas most companies use High Fructose Corn Syrup as opposed to sugar in it's various forms because of the cost.

The Soda Tax
     Recently, Congress has been seriously considering a tax of one cent per ounce of soda sold. The soda companies are, of course, up in arms as are many restaurants. I'm guessing that it won't pass because when people like McDonald's are opposing a bill, it's chances of success are pretty low. However, after reading how much profit is on each ounce of soda I have to say that I am totally for the taxes. It may make the 1,761% profit dip down to only a 1,000% profit. Oh no! Frankly, it's not that much money. I'm drinking a 20 oz. Faygo Root Beer as I type this(don't expect a review on that one, it's just too boring to get one) which would mean 20 cents more for this soda. Soda is also a luxury which can always be replaced by water. The fact that is serve no nutritional value makes me say that the tax should be welcomed as well.

     So, next time you're spending a bunch on a bottle of water and syrup think of just how few ingredients are in there and how cheap each one must be and consider it. For me, it'll always be the real sugar and small, independent bottling companies!

1 comment:

  1. Soda tax=double tax. They're taking our tax dollars and using them to subsidize farmers who grow corn, which makes HFCS cheap-which makes our soda cheap. If we then tax our soda above and beyond the normal sales tax, the government is just taking more money out of our pockets to further subsidize the farming of corn. They should just stop subsidizing corn so much, and that would allow corn farmers to sell their product at fair market value(instead of taking a loss), and would motivate food companies to start using cane sugar again, considering the price of HFCS would rise drastically, considering they'd not only have to buy the corn at fair market value, but put more money into refining it into a new product.