White Center finds itself a city divided — literally, down Roxbury Street — by the price of pop.
Ahmed Mohamed’s shop in the farthest reaches of West Seattle is so small you can easily miss it. But he’s nevertheless Ground Zero for Seattle’s latest economic experiment.
Mohamed runs West Seattle Halal Market, a two-aisle store specializing in meats and poultry butchered according to Islamic rules. A few shelves in the middle of the store, though, are given over to a popular side product that now has his neighborhood, White Center, literally divided.
“Here is the precious fluid,” Mohamed laughs, showing me around the store.
He holds up a two-liter plastic bottle of Coke.
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He once sold it for $2.79. Now it is $4 — a 43 percent increase, due to the city’s new tax on sugary beverages that went into effect Jan. 1.
“The customer — they look at the price and then they don’t even talk to you,” Mohamed said. “They just walk away.”
The reason is that a couple hundred feet away, and around the corner of Southwest Roxbury Street, sits a Bartell Drugs. It’s just 15 feet outside the city limits. And spelled out on its main marquee is one source of Mohamed’s problem: “GET YOUR DRINKS HERE,” it reads. “NO SUGAR TAX.”
Customers, including immigrant kids who don’t yet speak much English, all seem familiar with White Center’s new dividing line, Mohamed said.
“It’s near impossible for me to sell this now. They go over there, one block away, and there’s no tax.”
I don’t have strong views one way or another about Seattle’s new soda tax. I’m reserving the full force of my ire for when they jack up the tax on beer.
Mohamed said he, too, sees both sides: the health case for taxing soda more, and the business argument that it could harm small markets in the city. He predicts he’ll survive either way, as sugary drinks are a small slice of his sales.
But what’s interesting about his story is that it shows how incredibly price sensitive people appear to be. And also, how White Center may be an example of what economists call a “border effect” — a market distortion when there’s a price disparity across a boundary that customers can easily cross.
Five years ago, when Washington state privatized liquor sales and the price here soared, Idaho’s liquor sales boomed. In Spokane, the phrase “I’m heading to the state line” became a euphemism for “booze run.”
But some studies found that while liquor sales in bordering Idaho counties shot up by more than 10 percent, booze sales on our side did not drop (and have since increased by 22 percent). So the huge price hikes, combined with the border effect, may have surprisingly contributed to an increase in total liquor consumption.
Why? More availability for one thing. But also, when you make a “lure-of-the-deal” run for the border, you maybe end up buying more than you would have if the price had never been raised in the first place.
Now soda ain’t liquor. But some of the anecdotes out of White Center make it sound like the old Rat City is on its way to becoming Coke Town.
“Stores just down the street are advertising for people to buy drinks there because they don’t have Seattle soda tax,” lamented one White Center pizza-store owner, her shop 25 feet on the wrong side of the soda line, at a recent news conference.
I’m old enough to remember when “going to Tukwila” was a saying that meant “having sex.” Will “going to White Center” soon mean “a run to the border for tax-free Dr Pepper?”
A team of UW researchers is beginning a four-year, $2 million study to judge the tax’s effects. That’s good, as the city’s grasp of the situation seems a little suspect. It suggests, on its website, that customers somehow shouldn’t even have to pay it.
“The tax is not collected by the retailer,” the site says, “nor is the tax burden intended to fall onto the consumer.”
I mentioned that to Mohamed. He pointed up his block, toward a line that was invisible to me, but clear as paint on the street to him.
“Then why they all walking by to the other side?” he said.