retail news in context, analysis with attitude

The New York Times reports that the Philadelphia City Council is expected next week to pass a soda tax that would add one-and-a-half cents per ounce of carbonated beverages that contain either sugar or artificial sweeteners, a move that would increase the cost of a 20-ounce beverage by 30 cents. The tax will not apply to juice drinks that are at least 50 percent juice, even if they contain added sugar.

If the vote goes the way it is expected to, Philadelphia will become only the second US city to pass such a tax; Berkeley, California also has one. According to the story, "Other cities have been tracking Philadelphia’s proposal. San Francisco; Boulder, Colo.; Oakland, Calif., and several smaller communities are planning to introduce soda tax measures this year."

The Times writes that proponents of the tax managed to get their way not by emphasizing the potential public health advantages - such taxes usually are framed as a way of getting people to stop drinking sugary soft drinks, which have been linked to obesity, diabetes and tooth decay - but rather by pointing to the added revenue potential.

The money from the new tax will be "used to pay for popular initiatives, including expanded prekindergarten, and renovations of city libraries and recreation centers," the Times writes, though late-hour negotiations have meant that some of the money will be used to plug a budget shortfall.
KC's View:
It seems to me that certain things are inevitable. One is that while the city may have laudable goals in terms of how it plans to use the money, it is pretty likely that more of it will be used for mainstream budgetary purposes than for pre-K and city libraries. That's just a fact of life, and it won't be long before city officials will be looking for other ways to raise money. One can argue that this is because city government in Philly is bloated beyond repair, or that local residents are unwilling to prioritize and pay for things like pre-K and libraries.

The other thing that seems inevitable is that the soft drink industry will sue to block this tax. When the People's Republic of Berkeley does something like this, it can be characterized as an outlier. But when Philadelphia does it, the concern has to be that a series of dominoes are about to fall and land on an industry that already may be worried that its best days are behind it.