Soda tax is back in the spotlight
Philadelphia: the hometown of the Fresh Prince of Bel-Aire, the city of brotherly love, and it’s where your soda is taxed more than a beer. The sugary drink tax (also known as the soda tax), which was enacted in January, is in the spotlight once again as Pepsi announces 80-100 layoffs in its Philadelphia based distribution plants.
Pepsi Co spokesman Deva DeCecco wasn’t shy about putting the blame on the new tax.
“Unfortunately, after careful consideration of the economic realities created by the recently enacted beverage tax, we have been forced to give notice that we intend to eliminate 80 to 100 positions, including frontline and supervisory roles,” DeCecco said.
We warned you
The shade thrown at the soda tax is no surprise.
A coalition composed of store owners, beverage companies and labor unions previously warned the city of potential job loss due to the tax.
Danny Grace, Secretary Treasurer of Teamsters local 830 sent a letter to city officials soon after the tax passed. “This unfair tax that targets only one industry would be ruinous to the Teamsters, leading to the loss of thousands of family-sustaining jobs,” Grace warned.
Just the tip of the iceberg
While thousands of layoffs seems far fetched, we must consider that the layoffs at Pepsi could be the beginning of something huge.
In a statement to the Inquirer, Bob Brockway, COO of Canada Dry Delaware Valley announced plans to lay off 20% of its employees come March.
As for rival Coca-Cola, they haven’t detailed any layoff plans.
Blame it on the tax
Frank McGorry, president and general manager of Coca-Cola Refreshments Tri-State Metro Unit also put blame on the tax. “Everything we’ve said would happen by enacting this tax is proving to be true. We are evaluating how we will address the impact of this tax on our business. People are leaving the city to shop, small businesses are getting hurt, consumers are unhappy and people are losing their jobs,” McGorry tells the Philly Voice .
The potential rippling effect on Philadelphia’s distributors is due to the fact that the new tax is levied directly on distributors.
Distributors can absorb the tax themselves, or pass it on to consumers. In either case, distributors or their employees are threatened.
Soda tax supporters
Soda tax proponents are pumping the breaks on the blame.
Mayor Kenney argues that the soda industry is acting out of greed, passing the tax along to consumers and threatening layoffs, rather than lowering their own pay.
Bless his soul, did Kenney actually believe taxes wouldn’t be passed on to consumers? Mayor Kenney also believes that the soda industry may be leveraging the layoffs to scare other cities away from enacting their own version of the tax.
Old trend, new tactics
It may be too late. The soda tax trend has already taken root. Last November, three California cities- Albany, Oakland and San Francisco along with the town of Boulder, Colorado adopted their own soda tax.
[clickToTweet tweet=”Revenue from Philadelphia’s soda tax are reserved for community schools & park renovations. ” quote=”Unlike California’s soda taxes, which aren’t earmarked for a specific purpose, Philadelphia’s tax funds are reserved for Pre-K services, community schools and parks renovations. “]
Also important to note, Mayor Kenney framed the sugar tax debate as a matter of revenue, not a public health crusade.
Bold move, cotton. Let’s see how this plays out
This was a bold move and a play that other cities may adopt as budgets tighten. Sin taxes are nothing new, according to this map, they’re levied across our whole “sinful” country.
However, framing the debate so strongly around revenue rather than health benefits is a new move and a move businesses should keep an eye one, even if they aren’t selling soda. When budgets are limited, are all vices may be up for grabs.
#SodaSoDone
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