Philly Admits Soda Tax Is Crushing Local Small Businesses, Expanding "Food Deserts"

 Just one week after Chicago shockingly repealed their soda ban following a revolt from local business owners (see: Soda Tax Fizzles In Chicago As Cook County Officials Cast Decisive 15-1 Repeal Vote), it seems that Philadelphia's flirtations with forming a more perfect "nanny state" via the elimination of sugary drinks could be on a collision course with a similar fate.

As WHYY points out today, a survey conducted by Philadelphia's Controller Alan Butkovitz — a longtime opponent of the soda tax — found that nine out of 10 businesses reported revenue loss since the city’s sweetened beverage tax took effect earlier this year. Of those reporting revenue loss, 60% of them blamed the soda tax for their woes.

City Controller Alan Butkovitz today released the results of the Philadelphia Beverage Tax survey that found more than 60 percent of businesses indicated a revenue loss as a direct result of the new tax.


Of the 650 businesses that reported a decline in year-to-year revenue, more than 400 attributed “most” or “all” of the decline to the implementation of the Beverage Tax.  The majority of these businesses reported revenue losses of more than 10 percent.


“The overwhelming majority of businesses that carry products subject to the Philadelphia Beverage Tax feel a significant impact as a result of the tax,” said Controller Butkovitz.  “The tax has had detrimental effects.”


Butkovitz’s team, with help from various business groups, reached out to “more than 1,600” businesses that sell or sold taxed beverages. Response was purely voluntary, and 741 businesses filled out questionnaires.


“This is not going to be the comprehensive answer to everything, but I think it does create a serious warning and an attestation of what has been stated by a number of the businesses,” he said during a Monday news conference. “Because I think the administration has minimized and ridiculed the idea that businesses are fighting for survival.”

To our great 'shock', many Philadelphia grocers reported that customers were simply driving to the suburbs to do their weekly shopping which means that local retailers lost not only their soda sales but everything else as well.


And, as usual, the Office of the Controller noted that this latest misinformed regulatory overstep by Philly's liberal elites is most detrimental to the very same people it was intended to help, namely low-income, inner-city families who can't afford to travel to the suburbs for groceries and who are about to get crushed with higher prices following a wave of business failures.

According to Controller Butkovitz, the areas with the most businesses reporting revenue losses included West Philadelphia along the Market Street and 52nd Street corridors (19139), Hunting Park in North Philadelphia (19140), and areas around Juniata and Frankford (19124).  Many businesses in these neighborhoods reported losses of more than 10 percent.


“Consequently, these zipcodes have neighborhoods with some of the highest poverty rates in the city,” said Controller Butkovitz.  “These businesses cannot afford a one percent loss in business – let alone more than 10 percent.


“These are also neighborhoods subject to food deserts in Philadelphia. If these stores cannot continue to operate, it will be even more difficult to buy affordable or good-quality fresh food.”


Grocery stores reported the most revenue losses followed by convenience stores and restaurants.  Forty percent of businesses indicated they would have to make significant changes to keep their doors open.


"The tax seems to be impacting behavior and orientation toward the future,” said Controller Butkovitz.  “Many business owners seem apprehensive about the viability of their enterprises in the near and medium term."

Of course, facts have never really had much impact on political discourse in the past so absent an uprising from local business owners, similar to what we saw recently in Chicago, we wouldn't suggest holding your breadth while waiting for a repeal.