PepsiCo pulls some products over Philadelphia beverage tax

by Ron Sterk
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Pepsi 2-liters
PepsiCo is pulling 2-liter bottles of its products from grocery stores in Philadelphia.

PHILADELPHIA — New York-based PepsiCo, Inc. said it was pulling 2-liter bottles and 12-packs of its products from grocery stores in Philadelphia due to the city’s beverage tax.

The 1.5c-per-oz tax, which is levied on distributors, amounts to $2.16 on a 12-pack of 12-oz cans and about $1.02 on a two-liter bottle if it is entirely passed on to consumers. The tax applies to both caloric sweetened and diet beverages, and in PepsiCo’s case includes Pepsi Cola, Mountain Dew, Gatorade, Lipton Iced Tea and other products.

PepsiCo said it wants to offer products and package sizes that working families can better afford. The company earlier in March said it was laying off from 80 to 100 workers at Philadelphia area distribution facilities because of the beverage tax.

Pepsi 12-pack
Philadelphia's beverage tax has caused PepsiCo to pull 12-packs of its products from shelves in the city.

Philadelphia mayor Jim Kenney, who pushed for the tax that went into effect Jan. 1, 2017, said the beverage industry already was trending toward smaller container sizes before the tax was passed.

Unlike most existing or proposed soda taxes in other cities that are aimed at combatting obesity, diabetes and other health issues or increasing nutrition education, the Philadelphia tax was created for the purpose of raising revenue, according to both proponents and opponents, and was expected to generate more than $91 million annually. The tax was approved by the Philadelphia City Council in June 2016.

Boulder, Colo., and San Francisco, Oakland and Albany, Calif., all passed soda taxes last November, joining Berkeley, Calif., which passed a soda tax in 2014, and the Navajo Nation. Cook County, Ill., also has a soda tax planned, which like the Philadelphia tax, is aimed at raising revenue. Soda taxes also have been proposed in a few other cities, states and countries for implementation this year or next year. F
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