CHICAGO & PHILADELPHIA -- Chicago’s sweetened-beverage tax took a small step toward being repealed, while a new report about Philadelphia’s soda tax is giving opponents of the levy a new reason to challenge the nine-month-old consumer burden.
Here’s a look at recent actions in each city …
Philadelphia’s beverage tax is costing supermarkets $300,000 a month in lost sales as shoppers head to suburbs to make their purchases, according to a new study by a St. Joseph’s University professor.
Philadelphia enacted a 1.5-cent-per-ounce tax on sweetened beverages on Jan. 1, 2017. Since then, beverage companies have said their sales are down as much as 45%.
The new study by John L. Stanton, an expert in food marketing, found that total beverage sales in five Philadelphia supermarkets dropped by more than $80,000 each month, and the damage extended beyond beverage sales, hurting employment opportunities for beverage manufacturers and other related businesses, the Philadelphia Tribune reported.
“The average monthly loss in sales per Philadelphia store of $304,433 will lead to some reduction in labor force,” Stanton wrote in the study. Furthermore, the drop in supermarket sales will negatively impact distributors and other channels of distribution companies serving those supermarkets.”
Philadelphia hopes to raise $91 million in the tax's first year to help fund the city’s school system as well as its parks and recreation centers.
In Chicago, the Cook County Board on Sept. 13 delayed a vote to potentially repeal a soda tax that has spurred protests and hurt beverage sales.
Enacted Aug. 2, the tax added 1 cent per ounce to the cost of packaged drinks sweetened with sugar or artificial sweeteners. Recent reports suggest the sale of carbonated soft drinks have declined 30% since the tax was enacted.
Board members who oppose the tax, suggesting county retailers are losing too much business, proposed the repeal. However, the combined board agreed to send the proposal to the county’s finance committee for an Oct. 10 hearing. The delay allows Cook County Board President Toni Preckwinkle time to conduct a financial analysis of the tax so far, according to a Chicago Tribune report. In the meantime, the county will continue to collect the tax, which is hoped to bring in $67.5 million this year and $200.6 million in 2018.
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