EDITORIAL: Philadelphia’s new soda tax leads to big job losses

The Nanny Staters secured a victory last year when Philadelphia enacted the nation’s first-ever sugar-sweetened beverage tax. Supporters disguised the levy as a public health initiative. In fact, it was a massive government money grab.

Turns out it was also a job killer.

The tax adds 1.5 cents per ounce — that’s 18 cents a can or $2.16 for a 12-pack — to any drink containing a sugar-based sweetener. Not only does it include sodas with natural sugar or high fructose corn syrup, but it also covers sports drinks, energy drinks, iced tea, lemonade, some milks and bottled waters and sugar-free sodas.

The city estimated the tax would raise $7.6 million per month for education programs and renovations to parks and rec centers. According to preliminary data, however, revenues are falling 70 percent short of projections.

Turns out — and this is a real shocker — consumers aren’t eager to pay a premium tax for beverages when they can go across the city line and get the same product for far less. Now the city’s grocery stores and wholesalers say they’re shedding employees in order to offset the drop in sales.

Jeff Brown, CEO of Brown’s Super Stores, which manages six ShopRite stores in the city, told the Philadelphia Inquirer that his beverage sales were down 50 percent between Jan. 1 and Feb. 17 compared with the same period last year. More concerning, he said, is a 15 percent dip in overall sales at Philadelphia stores. As a result, the company has eliminated roughly 280 jobs and is expecting additional layoffs in the coming months.

“People didn’t change what they drink,” Brown said. “They changed where they’re buying it.”

And where are they buying it? According to Bob Brockway, chief operating officer of Canada Dry Delaware Valley, sales are up 20 percent in the suburbs of Philadelphia. The company distributes about 20 percent of the city’s soft drinks, and despite the boost in suburban sales, Mr. Brockway told the Inquirer that sales were down 45 percent in Philadelphia and 30 percent overall. The drop-off means the company will lay off 20 percent of its workforce the first week in March — workers who will likely have to find new jobs elsewhere.

While the tax is currently under appeal in a case expected to go to court in April, the Nanny Staters aren’t deterred. A spokesman for the city said that residents will stop driving over the city line to buy soda once they “do the math and realize the cost of gas or the pure inconvenience doesn’t make it worth it.”

Tell that to those who lost their jobs due to this misguided social experiment.