Early Returns Look Good in Philadelphia’s Nation-leading Fight for a Soda Tax

Marc Stier |

I wasn’t surprised by the substantial revenues that the soda tax is bringing in, even while there is some reason to believe that soda consumption is down in the city, as we predicted it would be.

For me, the soda tax has two aims–to bring in revenue and to discourage the over-consumption of soda, which contribute  to diabetes and heart disease. The second aim will  over five or ten years become more important as the tax plus public education teaches people consume to a lot less soda. Revenues will decline then, and our healthier city will need to replace some of them  raised by the tax. But at present, it looks like  revenues will be substantial to pay for the expansion of pre-K education and the community playgrounds and recreation centers for which the tax is dedicted.

It will  take a month or two for these new revenues  to ramp up fully because (1) Not every distributor is aware they have to pay the tax or has made arrangements to do so; (2) Distributors had inventory on which they did not pay the tax and probably stocked up in December in save some money; and (3) iI the first month sticker shock and protest trips across the city line probably reduced soda purchases more than will be seen in the future. 

All of those factors, including the sticker shock  going to decline in importance. Critics of the soda tax among distributors and owners of supper markets keep saying that because of the tax people will buy a lot of soda outside the city and that will be substantial job loss  among soda distributors and / or supermarkets.

I don’t find that plausible and here is why: When I was the president of a neighbrhood association, West Mt. Airy Neighbors in 2002 and 2003, I worked to bring  a new supermarket about to the Mt. Airy of Philadelphia.  I talked then to a lot of folks who ran supermarkets to understand how their business worked. The one thing everyone told me is that people shop locally for groceries. If that’s true, people are not going to drastically change where they shop because of the soda tax.

Industry folks are saying something else now but it’s hard to see why a tax on one, non-essential good could change the long standing nature of the supermarket business.  I’m much more inclined to believe what people in the industry told me in 20013, when they had no reason to tell me anything than the truth, than what they are saying now when they are campaigning against the soda tax.

In addition, the  tax is on soda, not thirst. If people drink less soda, they will drink other beverages and wholesalers will distribute those other beverages. There will be some shift to tap water and some ornery folks will cross the city line to shop for soad. Distributors and retailers will lose some business. But as they shift to selling healthier drinks they will be fine.

Perhaps eventually they will save even more money when they stop spending millions to fight the tax in public and in an absurd legal case that I believe they have no chance of winning.

But that won’t happen soon. The conflict over the Philadelphia soda tax is not just about what happens in the largest city in our state. Philadelphia is ground zero in a nationwide  fight between big soda and the  public good. State and local governments all over the country are watching what is happening in Philadelphia and planning their own soda tax. Big soda is not just fighting to kill Philadelphia’s soda tax but to stop it from spreading to other states and cities.

And  that’s why all of us who recognize both the revenue potential and public health benefits of the soda tax should thank  Mayor Kenney and his staff for leading the way in this nation-wide fight.