Philadelphia Sugar-Sweetened Tax Sours Business Leaders

Published December 4, 2017

As the first anniversary of Philadelphia’s excise tax on sugar-sweetened beverages draws near, business leaders are criticizing the surcharge.

In January 2017, the city of Philadelphia began charging a tax of 1.5 cents per ounce of soda and other sweetened beverages purchased at restaurants or grocery stores in the city. The levy, paid by business owners, is also applied to low-calorie soft drinks, bottled coffee and tea, and other non-alcoholic drinks containing artificial sugar substitutes.

The tax’s revenue is being used to fund arts and cultural programs, expanded preschool education, and government employee benefits.

Driving Out Consumers, Businesses

John Longstreet, president and CEO of the Pennsylvania Restaurant and Lodging Association, says residents are shopping outside of the city to avoid the soda tax.

“People are leaving Philadelphia to shop now because they don’t want to pay the tax inside the city,” Longstreet said.

Longstreet says the tax is making it more difficult for small businesses, such as independent grocery stores, to stay in business.

“They’re in jeopardy of leaving the city, because they can’t make any money here,” Longstreet said.

Study Accused of Bias

A November 2017 Harvard University School of Public Health study concluded the beverage tax is not affecting overall grocery store sales volume in Philadelphia, even though it found a 57 percent decline in soda and other sweetened-beverage sales in the city.

Alex Baloga, president and chief executive officer of the Pennsylvania Food Merchants Association, says the Harvard study was funded by a group connected to Michael Bloomberg, a vocal supporter of soda taxes.

“That’s clearly a problem and a conflict,” Baloga said.

Michael Carroll ([email protected]) is a writer for An earlier version of this article was published at Reprinted with permission.