Last year, when Philadelphia lobbied for (and won) the implementation of a soft drink tax, Big Soda fought it tooth and nail. And for good reason, as it turns out. The city’s soda sellers say that the 1.5 cent-per-ounce tax has reduced sales by half, and PepsiCo has been forced to cut jobs after their sales fell 40 percent in the city. Canada Dry Delaware Valley — a local soft drink distributor — has also reported a 45 percent decrease in sales. The pattern is alarming to businesses that rely on consumer popularity of the sweet drinks.
Philadelphia became the first major city last year to implement the soda tax, and other cities like San Francisco followed, with similar measures on the ballot in New York. Philadelphia’s tax went into effect on January 1.
“In 30 years of business, there’s never been a circumstance in which we’ve ever had a sales decline of any significant amount,” Jeff Brown, chief executive officer of Brown’s Super Stores, a franchise operation that owns a dozen Shop Rites, told Bloomberg. “I would describe the impact as nothing less than devastating.”
Sales are also hurting small local businesses like mom and pop grocery stores and bodegas. The sales tax is technically on the distributor side, but consumers are seeing their favorite drinks double in price due to the added costs.