PHILADELPHIA -- Following a steep drop in sales after Philadelphia enacted a sugary-drink tax, PepsiCo is pulling 2-liter bottles and 12-packs of its products from stores in the city, according to reports.
The company says it wants to offer products and package sizes working families can better afford, according to an Associated Press report.
The 1.5-cent-per-ounce tax on sweetened and diet beverages is imposed at the distributor level. If fully passed on to the consumer, it amounts to $1.44 on a six-pack of 16-ounce bottles.
The company's decision affects sodas Pepsi and Mountain Dew and other sweetened drinks like Gatorade and Lipton Iced Tea, AP said.
In reaction, Mayor Jim Kenney's office said the industry was trending toward smaller sizes well before the tax was approved last year.
Retailers in Philadelphia, which in June 2016 became the first major city to enact a tax on sugar-sweetened beverages, reported a 30% to 50% drop in beverage sales since the beginning of the year.
“People are seeing sales decline larger than anything they’ve seen up to this point in the city,” Alex Baloga, vice president of external relations for the Pennsylvania Food Merchants Association, told the Philadelphia Inquirer.
The city adopted the 1.5-cent-per-ounce tax on sugar-sweetened and diet beverages in an effort to raise up to $92 million per year to fund education programs; the tax went into effect Jan. 1, 2017.