Tuesday Could Be the Beginning of the End of Philadelphia’s Soda Tax – Smart Media Magazine

Tuesday Could Be the Beginning of the End of Philadelphia’s Soda Tax


PHILADELPHIA — Jeff Foster, 58, a retired security guard with an abiding sweet tooth and a generous paunch, scowled as he considered the cornucopia of refrigerated soft drinks at his local convenience store.

“It’s just not right,” he said, complaining that prices on his favorite brands had nearly doubled since a tax on sweetened beverages went into effect here two years ago.

Then he did something that might make public health experts beam. He headed to the cash register, leaving behind the two-liter bottle of Day’s Champagne Cola he coveted.

“I’m on a fixed income, so I have to watch my spending,” said Mr. Foster, who has high blood pressure. “Plus, my doctor says I’ve got to lose weight.”

Across the country, advocates and opponents of taxes on sugary beverages have been closely following the twists and turns that have bedeviled Philadelphia’s ambitious experiment, a legislative hallmark of Mayor Kenney’s first term that has raised $200 million for education and infrastructure programs.

In the months before its approval in July 2016, the beverage industry, allied with grocery store owners and the Teamsters union, poured $10.6 million into the fight against the measure; supporters spent $2 million, much of it from Michael Bloomberg, the former New York mayor who has been a generous backer of soda tax initiatives across the country.

In a cash-strapped city where a quarter of all residents live in poverty, Mr. Kenney sold the tax as a revenue generator, not a nanny-state gambit to change unhealthy habits. The City Council approved the measure, 13 to 4.

Opponents immediately took their case to the courts, but last July the Supreme Court of Pennsylvania rejected their argument that the tax is illegal. The decision freed up millions of dollars in soda tax revenue that had been held in escrow and directed it toward creating 4,000 prekindergarten slots, 12 new community schools and an ambitious program to rebuild the city’s crumbling libraries and recreation centers. Next year, the city plans to add another 1,000 pre-K seats.

“It’s been an absolute success,” the mayor said on Friday after visiting a museum that was hosting dozens of children from the city’s expanded pre-K program. He said he was not especially worried about the future of the tax, and he had harsh words for the beverage industry, which last month spent more than $600,000 in its campaign to turn public opinion against the measure.

“This is all about rich white men who want to become even wealthier and who want to deny many kids of color an opportunity for an education,” he said.

Industry executives say the tax is a failure and that it goes against the will of the people. “Beverage taxes hurt working families, small local business and their employees,” said William Dermody, a spokesman from the American Beverage Association, which news reports indicate has spent more than $1 million on the city elections from April 2 through May 6. “And polls show a majority of Philadelphians want it repealed.”

In a city with some of the nation’s highest rates of obesity and Type 2 diabetes, public health experts have a different concern: whether the tax is having a significant impact on people’s consumption habits.

A study published last week in the medical journal JAMA found that the law dampened supermarket sales of sweetened beverages by 38 percent; a study by Stanford University’s Graduate School of Business, published last January, put that number at 22 percent. Other studies have found less significant effect. Experts say it could be years to determine whether the policy has improved the overall health of the city’s residents.

Christina A. Roberto, the lead author of the JAMA study, said Philadelphia’s results far outpaced those in other places that have adopted beverage taxes in recent years, among them Berkeley, Calif., and Mexico, which have since experienced a roughly 10 percent reduction in soda sales.

“We are losing the war against chronic diseases, so it’s rare to see something that has this kind of impact,” said Professor Roberto, a health policy expert at the University of Pennsylvania’s medical school. “It’s not surprising that if you raise the price of something, people will buy less of it.”

More than 40 countries have adopted soda taxes, and since 2014, seven municipalities in the United States and the Navajo nation have embraced such measures.

The industry has been pushing back aggressively, most notably at the state level, where it has convinced legislatures in Arizona, Michigan and California to pass laws that bar municipalities from adopting soda taxes. It has also backed statewide ballot measures to ban such taxes, with mixed success.

But Dr. Jim Krieger, executive director of the advocacy group Healthy Food America, said the dynamic could change next year, when California and a number of New England states are expected to take up statewide soda tax legislation. “The momentum is building,” he said. “If a state like California were to adopt a tax, that would be a game-changer.”

Even supporters say that Philadelphia’s measure has flaws. For starters, it covers any beverage with added sweeteners, including diet sodas and fruit juices that have modest amounts of artificial sweeteners. Critics say that sends out a muddled message about the importance of avoiding sugar. And because the tax only applies to liquids, it does not cover powdered drink mixes, which have seen a spike in sales as price-sensitive shoppers find ways to avoid the tax.

The other problem was on display last week at the Acme supermarket in Bala Cynwyd, a town just across the city line that was buzzing with shoppers, their carts laden with 12 packs of Sprite, jugs of Sunny Delight and a kaleidescopic array of Gatorades. Russ Bompartito, the store director, said employees could barely keep up with the demand from customers who drive in from the city to stock up on beverages.

The store has rejiggered its displays, placing towers of soda at the end of every aisle, and a basement storage area has been taken over by palettes of beverages that delivery trucks have to replenish several times a day.

“It’s been a real headache,” he said.

Out in the parking lot, Carol Marks, 60, a postal worker from North Philadelphia who makes the trip twice a month, was loading her trunk with cases of fruit flavored Ginger Ale. “Who doesn’t want to save money?” asked Ms. Marks, who has diabetes and is currently out on disability. “This tax is ridiculous.”

Jim Perkins, the president of Acme, which has 16 stores in and around Philadelphia, echoed the complaints of business leaders who say that the benefits of the tax have been illusory because many residents simply leave the city to buy beverages. He said soda sales at his stores have plummeted 52 percent and many stores have seen an overall drop in business.

“What concerns us is not just the sugary drinks, but it’s that you’ve lost the customer who is buying milk, meat and other staples,” he said. “You’ve lost the whole consumer.”

Mayor Kenney says he has a solution to that problem: a statewide beverage tax, though the prospects of such a measure appear dim given Republican control of the legislature.

In the meantime, residents like Mr. Foster, the security guard, are bearing the brunt of the tax. Without access to a car, he does much of his shopping at the 10 Brothers Food Mart, a corner store that stocks mostly packaged food and sells no fresh produce.

Despite his disdain for the measure, Mr. Foster acknowledged the tax was having the desired effect. He helps take care of his five grandchildren, who clamor for the fluorescent blue bottles of Little Hug, a sugary drink that now costs 50 cents, double its previous price.

“They just drink this stuff like it’s water,” he said. “Now if I could only get them to drink water.”



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