Last summer, Philadelphia made history by becoming the first major city to implement what so many states and cities have long considered: a soda tax. The sugary drink tax has already had an impact: It has cut soda sales in half, and PepsiCo’s Philadelphia headquarters have downsized after soda purchases plummeted. Now Big Soda is fighting back. The American Beverage Association and the Pennsylvania Food Merchants Association presented oral arguments contesting the legality of the tax on Wednesday in a Pennsylvania appeals court in Pittsburgh.
One of the arguments Big Soda has made is that the beverage tax conflicts with the Pennsylvania sales tax, according to NPR. The opposing side argued that the tax is not duplicative because it is distributors — not consumers — who bear the brunt of the tax. However, to compensate for the extra taxes being levied on their product distribution, retailers are often required to increase prices.
The tax has also impacted local businesses:
"Overall, my business is down by 15 percent — an unsustainable drop in an industry with tight margins," Jeff Brown, a franchise owner of six ShopRite supermarkets in Philadelphia told NPR. "This tax has also forced me to cut thousands of hours each week from my union employees.”
During the court proceedings, the city will hold off on expanding many of the programs that the city has proposed will be funded by the tax revenue — the measure currently funds 2,000 pre-K spots for poorer families, but a planned expansion of that program will not go forward.