Soda sales fizzle in Philadelphia after tax
Soda sales plummeted in Philadelphia after they were taxed, a new study shows.
A study published in the Journal of the American Medical Association found that the city’s new tax caused a “significant and substantial decline” in soda sales.
The results also show that the tax boosted sales in nearby areas as customers sought to avoid the levy.
Overall, sales fell by 38% even when factoring in the spike in neighboring areas, the study said. Philadelphia region shoppers bought almost 1 billion fewer ounces of soda in 2017 than in 2016.
The outcome could influence policymakers weighing similar moves in other jurisdictions.
Supporters say the soda tax effectively discourages unhealthy consumption of sugary beverages, potentially fighting obesity and other conditions. Opponents say it disproportionately hurts lower-income people, damages businesses and represents an inappropriate infringement on consumer rights.
The tax, which took effect at the beginning of 2017, is 1.5 cents per ounce on sugary or artificially sweetened drinks. That translates into 30 cents for a 20-ounce bottle and about a dollar for a 2-liter.
Sales inside Philadelphia fell 51%. Sales in nearby areas increased 43%.
The study examined 291 stores, including supermarkets, mass merchandise stores and pharmacies. It used the city of Baltimore as a control group to account for other factors not related to the tax.