THE SODA TAX
Soda tax proposals have failed in more than 30 cities and states in recent years:
Berkeley, California: Before Philadelphia’s move, Berkeley was the only American city with a tax on sugary drinks.
New York: As mayor, Michael Bloomberg led failed efforts to ban on the sale of large soft drinks in New York City and to persuade the state legislature to impose a statewide soda tax.
Other cities: San Francisco; Boulder, Colorado; Oakland, California, and several smaller communities are planning to introduce soda tax measures this year.
In a blow to Coca-Cola Co. and other beverage giants, Philadelphia on Thursday became the first major U.S. city to pass a special tax on sugary drinks.
The move is likely to spark a court challenge by the industry, which has spent heavily in recent years fending off the concept in other cities and states.
The Philadelphia City Council voted 13-4 for a 1.5 cent-per ounce tax, down from 3 cents proposed by Mayor Jim Kenney. The mayor pitched the tax not as a punitive measure against soda makers but as a needed revenue source that will raise about $90 million in its first year.
He called it “a historic investment in our neighborhoods and in our education system.”
Similar measures have failed in several places. But Berkeley, Calif., passed a 1-cent tax in 2015, and Mexico has had a tax since 2014. San Francisco, Oakland and Boulder, Colo., reportedly could vote this year on soda taxes.
To date, a soda tax has not been proposed in Atlanta, Coke’s hometown. A spokesman for Mayor Kasim Reed said he was traveling and unavailable for comment on the issue.
The move comes as Coke, Pepsi and other beverage companies struggle with falling soda sales in North America as consumers switch to teas, waters and energy drinks. Health advocates also have blamed the nation’s obesity epidemic in part on the consumption of sodas and diet beverages.
Coca-Cola referred all questions to the American Beverage Association, which represents the soft drink industry.
In a statement, the ABA said, “The tax passed today is a regressive tax that unfairly singles out beverages – including low- and no-calorie choices. But most importantly, it is against the law. So we will side with the majority of the people of Philadelphia who oppose this tax and take legal action to stop it.”
The ABA has pushed back hard on soda taxes, defeating them in more 30 states and cities, including two previous attempts in Philadelphia. It successfully sued former New York Mayor Michael Bloomberg’s administration in 2012 after the leader of the nation’s largest city put restrictions on soft drink serving sizes in restaurants, movie theaters and at delis.
In Philadelphia, previous efforts had also failed. Kenney sold the tax as a measure to help pay for prekindergarten, community schools and recreation centers.
“The bold action by Philadelphia’s mayor and city council, in the face of $5 million worth of industry pressure, is a win not just for the health and well-being of Philadelphia kids but for communities cross the country,” said Jim Krieger, executive director of Healthy Food America.
The tax is to be levied on distributors and is expected to be added to prices. Local opponents in Philadelphia objected on grounds the tax is regressive and will hit poor people hardest.
The version passed Thursday came after months of politicking by Kenney and cut the amount while broadening the tax to cover a wide range of drinks including diet sodas and sports and energy drinks.
The Associated Press contributed to this story.
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