Philadelphia’s sugary beverage tax, levied on all sugar-based or artificially sweetened beverages, came into effect on Jan. 1. The 1.5-cents-per-ounce tax is paid by the distributors of sugary beverages, some chose to pass the price to consumers by charging more for the drinks.
Stores that sold sugary beverages before City Council passed the new tax, including the Fresh Grocer at Broad and Oxford streets, have added signs to the drinks outlining the added price of the tax.
Fresh Grocer also added tags beneath each drink price with how much will be taxed at the register. These grocery stores also placed signs on their entrance doors alerting customers that the tax has gone into effect.
For example, a drink that would cost $1.99 at eight ounces would be labeled as such, with a tag beneath it explaining the price will include an additional 12 cents at the register.
Mayor Jim Kenney accused retailers posting the tax prices as a purposeful attempt to make customers angry about the tax, according to CBS Philly.
Kenney added that retailers spent $10.5 million in an advertising campaign against the tax last year.
The sugary beverage tax is expected to generate $400 million over the next five years. An estimated $256 million of the cost will go toward expanding the city’s pre-k education and $56 million will go toward paying back a bond for Kenney’s Rebuild program for recreation centers and parks throughout the city. The $88 million left over will go toward opening 25 community schools, invest in the pension system and pay back a green infrastructure bond.
Some products are excluded from the tax altogether, like baby formula, drinks made from at least 50 percent fresh fruit, vegetables or milk and unsweetened drinks.
“In the interest of transparency, we have decided to show the effect of the Philadelphia Beverage Tax clearly on the store labels,” Fresh Grocer spokeswoman Maureen Gillespie told The Temple News. “The impact of the tax is so significant that it can equal or in some cases exceed the retail price of the product. We believe that a price increase to this magnitude should be clear to customers, especially during this transition period.”
The increase in price has been shocking to some community residents. Mamie Rayford, 82, a resident on 15th Street near Allegheny Avenue, said she went to Fresh Grocer to purchase juice but the new tax discouraged her from buying any.
“It’s really stopping me, because I’m on a fixed income,” she said. “I thought it was just going to be the sodas, but it’s more than that. I’ve been reading about [the tax], and it’s supposed to be helping the schools but I don’t believe that.”
Senior biology major Patrick Bell, who does not often buy soda, said he believes the sugary beverage tax could be helpful for the city.
“If it’s being put toward children and school, I think that’s a good thing,” he said. “It’s a good incentive for people not to buy soda, people already drink it too much. I hate the phrase ‘water is boring,’ you gotta learn how to like water.”
Gillian McGoldrick can be reached at email@example.com or on Twitter @gill_mcgoldrick.