‘Soda tax’ stakes escalate in pivotal fight
PHILADELPHIA — Less than three months into Philadelphia’s new tax on sweetened drinks, the stakes have escalated: Beverage makers say the measure is hurting sales so much they need to cut jobs, while city officials say the moves are a ploy to get the tax struck down.
Some supermarkets opposed to the tax are making a statement by printing out the added cost on receipts and store shelves. The tax began Jan. 1 and is levied on transactions between drink distributors and retailers, but many grocers are passing it on to drinks amid an “Ax the Bev Tax” campaign to kill the measure in court or through repeal. One widely shared photo on social media shows a receipt for a 12-pack of 16.9-ounce bottles of Propel Water, which is artificially sweetened. The receipt says the drinks cost $5.99, and the tax adds $3.04.
IGA supermarket has hung signs near affected drinks that say “Philadelphia Sugar Tax Item,” with the price of a 2-liter of Coke going from $1.99 to $3.
“I just can’t afford it,” said Margaret Atkinson, who was shopping at the supermarket this week. Atkinson said she has switched to generic brands and is asking a nephew in the suburbs to pick up soda for her. She’s also drinking more homemade iced tea and bottled water with flavor packets.
Fran Flanagan, also shopping at IGA, said he planned to buy more of his drinks outside the city on weekends, and noted the tax has changed his drinking habits.
“Mostly I’m drinking spigot water, and not because it’s healthier,” said Flanagan, who opposes the beverage tax.
Philadelphia is among the first U.S. cities to implement such a special per-ounce tax. While officials touted it as a way to raise money for pre-K education — not as a health measure as in other cities — some advocates also hail it as a way to fight sugary drink consumption and obesity. For the beverage industry, which has already seen soda consumption decline for several years, overturning the tax in Philadelphia could be critical in sending a message to other cities and stopping the measures from gaining momentum.
Soda makers have previously opposed such taxes by warning supermarkets could pass the cost onto other groceries, not just drinks. They also say there’s no evidence the taxes work in changing behavior or reducing obesity, since people can still fill up on other calories.