When the mayor of Philadelphia first proposed a 3 cents-per-ounce tax on sugary drinks, the American Beverage Association was quick to finance a campaign railing against it.
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At about 50 cents a liter, the tax will apply to sweetened drinks, including those with artificial sweetener. Councilmembers voting against the bill were the body’s three Republicans, Brian O’Neill, David Oh, and Al Taubenberger, and Democrat Maria Quinones-Sanchez.
Hundreds again flooded council chambers Thursday for one more day of rigorous debate. In Mexico, though, soda sales have been rebounding after initially falling in 2014, when a roughly 10% sugary-drink tax was introduced. “It is also important to study the impacts and incidence of the tax carefully”, he said. In “Healthy Food Access in Pennsylvania”, The Food Trust, an organization that fights for food accessibility and operates in Philadelphia, said, “There are significant areas of the commonwealth with few full-service grocery stores and many neighborhoods in which none exist”.
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Because of how the soda tax in structured, though, that might have to change. What makes Philadelphia’s proposal different this time is that Mayor Jim Kenney focused on the potential fiscal benefits of a tax rather than public health.
With Americans growing wary of sugary products, US soda consumption fell for the 11th straight year in 2015, according to Euromonitor data.
“Discriminatory taxes send the wrong message to consumers”, said the American Beverage Association, which includes Coca-Cola and PepsiCo. On soda, he pushed for a tax, then a ban on soda purchases with food stamps, and finally a much-lampooned limit on the size of sugary drinks.
“Congrats to Philadelphia’s city council and Mayor @JimFKenney for standing up to the beverage industry”, Bloomberg said on Twitter.
The new tax goes into effect on January 1, 2017 and is estimated to raise $91 million a year. She adds that this law is historic and could set a precedent, especially after “other major US cities – including NY and San Francisco – have tried and failed to pass similar measures”.
The strategy worked in Britain, where a new soft drinks levy was announced in March after officials emphasized the country’s obesity crisis, saying it cost the economy billions of pounds a year and was a huge burden on the state-funded health system.
This item has been corrected by removing the erroneous reference to the businessman’s spending and showing the industry spent millions of dollars to fight the tax proposal.
Ali Dibadj, an analyst at Sanford C. Bernstein & Co. who covers the soft-drink industry, said Philadelphia’s success stems from the fact that it didn’t position the legislation as a health measure.
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Critics of the tax, including Democratic presidential candidate Bernie Sanders, point out that it will fall most heavily on the city’s poor and will also hurt family owned restaurants and other small businesses.
