User:Woozle/soft drink hard sell

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Contents 1 Intro 2 The Story 3 The Issue: Analysis 4 The Issue: Essentials

Intro

This has to do with some corruption-related (or at least process-related) issues, although it's not clear where the fault lies or exactly what should be done about it. My answer, though not an immediate solution, is both meta (i.e. not specific to this issue) and pro-transparency.

The Story

Several months ago, Rudino's (a local pizza-buffet-and-submarine-sandwich chain) stopped carrying Dr. Pepper. This is bad, because Sandy wants Dr. Pepper (or Mr. Pibb, but almost nobody serves Mr. Pibb even though Sandy finds it slightly superior).

We asked about this at one Rudino's location, and they told us they had looked at the usage stats for all the items on the fountain and Dr. Pepper was the slowest mover, so they replaced it with something which was apparently more popular (something like diet caffeine-free left-handed Sprite Zero). He did say that they would see about stocking Dr. Pepper in bottles or cans in the refrigerator, so we left it at that.

Today, however, the counter person at a different Rudino's told us a somewhat different story. He said they had stopped serving it because the distributor had stopped carrying it (not because of any decision at Rudino's) and – this is the crucial bit – even if they went to a grocery store and bought some, the restaurant couldn't put it in the refrigerator because the distributor owns the refrigerator and won't let the restaurant put anything in it except what they provide.

The Issue: Analysis

The traditional liberal solution for this (admittedly somewhat trivial, on the face of it) issue would presumably be some kind of regulation. My initial thought was that yes, this might indeed be necessary in order to maintain the fairness of the playing field; the little guy (Dr Pepper, which is not part of the Coke-Pepsi near-duopoly) is clearly being squeezed out by the big players with the money to spend on shiny new display refrigerators. The big guys have bought the playing field and won't let anyone else in; something must be done.

Or, to put it in Lessigian terms, money is clearly influencing the "free market" in a negative way: corruption.

On further reflection, though, it seems more complicated. I tried looking at it from a conservative point of view instead, thinking that if I could come up with a solution that was consistent with conservatism while being acceptable to me (a frequent defender of liberal ideals), then maybe it would be something a majority of reasonable people could agree on. Can we find a solution which doesn't involve making the rules more complicated?

The traditional conservative way of looking at this, if I understand rightly, might go as follows:

• The distributor owns the refrigerator, so he (conservative agents are always "he", right?) has the right to do whatever he wants to with it.
  • Counter: Well, isn't Rudino's free to do whatever they want with their space? The fridge is on their property, so they should be able to put whatever they want into it.
    • Okay, obviously they signed an agreement which stipulated that they wouldn't do this, possibly with stiff penalties if they're found stocking contraband Dr Pepper or Cheerwine or something. They weren't (technically) forced to sign this agreement. But (a) see next point, and (b) what if the alternative was not being able to stock any major soft drinks (instant death!)? (What are Coca Cola's contracts like? If they were any better, wouldn't this place already be serving Coke, which is somewhat more popular than Pepsi?)
  • Counter: But Rudino's isn't really all that free; they have to act to maximize their bottom line. If they get a free fridge (and a nice-looking fridge it is, too) into the deal – presumably along with maintenance, and probably a replacement anytime that one starts to look shabby (can't sell drinks from a shabby-looking fridge, now, can we) – that adds considerably to their profit on the drinks. If they chose this deal over any others that were offered, it must be because this was the most cost-effective solution for them – but one which unfortunately involved giving up the freedom to choose their bottled drink selection.

The Issue: Essentials

What it seemed to come down to relates to two conservative ideas:

1. the idea that people/businesses should be free to make money, and lots of it ("whatever the market will bear" is an oft-heard phrase), while liberals (conservatives often say) just want to tear things down because they're basically jealous and can't stand for anyone to have more than they do
2. the idea that people/businesses need to take responsibility for their own actions. If you sign a contract that turns out to be exploitative, that's your own damn fault.

If you take these ideas as stated and apply them to this situation, then it seems clear that the soft drink distributor should be able to require the restaurant to use their fridge in exactly the specified manner – and if this turns out to be an unexpectedly bad deal for the restaurant whether due to customer complaints over the lack of Dr. Pepper or due to fine print in the contract whose significance only becomes plain later on), then tough luck.

I want to refine these ideas a little.

I think it's great if people make money for delivering value. If someone provides a service, it's fair that they should make money off this. If they deliver an especially useful service, or do it better than anyone else, or do it first, or take a big risk in creating the structure necessary to deliver it, then perhaps they should even make absurdly large amounts of money doing so (as society's incentive for taking risks for productive ends, or for taking the time to think up the "better mousetrap"; given that reward, too, it seems likely they may find more great things to do, further benefiting the world at large).

I don't, however, think anyone should make money for preventing value from being delivered.

The problem here is that the soft-drink distributor is doing both. He's providing a free refrigerator, but he's also effectively restricting the variety of drinks which the restaurant can serve.

Or is he? If the restaurant is being saved the money they would ordinarily spend on a display fridge, surely they could invest some of that in a smaller fridge for less-demanded drinks? What is preventing this? Is it that the large display fridge is taking up all the space they can reasonably allot for drink storage? Is there something in the contract which actually forbids them from providing any other soft drinks (or penalizes them for doing so)? Is the cost of maintaining the fridge recouped in the price of the product delivered to the restaurant, and if so why did the restaurant choose to go with this restrictive contract rather than taking out a loan for their own fridge? The ethics are in the details.

Or, in other words, there's no way of solving this problem without knowing what the contract says.

Possible meta-solution: all legal contracts between businesses should be publicly available. "If it's not public, it's not legally enforceable." This might not solve the immediate problem of large companies forcing smaller companies out of the marketplace, but it is one simple rule which could help solve a broad range of similar problems. In this case, it would at least help us understand exactly how they are doing it, and why the restaurant is going along with it – and leave much more opportunity for others to suggest solutions or even spot unnecessarily exploitative terms.

So now I'm looking for the objections to this idea. Anyone?