The citizens of Philadelphia have been rocked by a tax on sugary drinks like soda, although the hike was intended to improve their health.
As outlined by Hotair on Saturday, the “soda tax” has actually led to Philadelphia residents traveling outside the city to buy their soda (and likely other goods), decreased the city’s revenue, and led to layoffs in the local beverage industry and cut hours for employees at small markets. It did not, however, lead to an increase in healthier beverage purchases in the city.
When the soda tax was first announced, workers at Pepsi took a hit. “With sales slumping because of the new Philadelphia sweetened beverage tax, Pepsi said Wednesday that it will lay off 80 to 100 workers at three distribution plants that serve the city,” philly.com reported in March of 2017.
And last month, the local outlet reported that the owner of Acme Markets, who has 16 stores in Philadelphia, had to cut employees’ hours because of the tax: “The beverage tax fell on about 4,000 items. In Acme city stores, soda sales dropped as much as 80 percent. Sales of other items covered by the tax, such as juices, creamers and energy drinks, were down 30 percent, and the number of customers declined by 5 percent. Philly stores cut an average of 150 to 200 employee hours per week, resulting in lighter paychecks for employees.”
But the hit the employees took did not equate to a win for the “health” of its citizens. As noted by Hotair, Philadelphia residents were traveling outside the city to avoid the tax hike on their drinks.
A CNN report on a study from medical journal JAMA focused in on the 51% drop in city soda purchases, but admitted: “While researchers found that sales of sugary beverages fell in Philadelphia after the tax, beverage sales in nearby towns and counties without the tax went up. That suggests people may have been traveling to get their soda at a reduced price.”
“People stopped buying their soda in the city (and almost undoubtedly a lot of other shopping list items) and decided to shop where prices were lower,” Hotair noted.
So was there at least an uptick in healthier beverage purchases because of the tax? Nope. “Philadelphia did not see an increase in sales of untaxed beverages such as bottled water,” CNN reported.
CNN did not discuss the revenue hit Philadelphia took, but Hotair did: “The tax on soda increased by 17%, but the sales fell by 51%. So, let’s look at this assuming one million ounces of soda was sold annually before the tax went into effect. If sales had remained the same, the city would have realized $62,400.00 in revenue instead of $54,300.00. But with the volume cut in half, they managed to slash their revenue to $31,200.00.”