Soda Tax Causes Layoffs and Losses in Philadelphia

PepsiCo to lay off 80 to 100 employees because of the tax

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Since Jan. 1, the city of Philadelphia has implemented a 1.5 cent per ounce tax on soda and other sweetened beverages, causing businesses to incur losses and lay off workers, the New York Post reported.

PepsiCo announced last week that it saw a 43 percent drop in business because of the new tax and would lay off 80 to 100 employees over the next few months.

Canada Dry also has eliminated positions due to declining business.

"We have had to lay off about 30 positions simply because the business is down as much as it is in the city of Philadelphia," said Bob Brockway, Canada Dry’s president.

The American Beverage Association, a trade association that represents the nonalcoholic beverage industry, is also critical of the tax, saying it caused prices to skyrocket and is a job killer.

"Distributors like Canada Dry are off about 50 percent year-on-year," said Anthony Campisi of the association. "The 20 percent increase in suburban sales we’re seeing (as shoppers cross city lines to save money) is far from enough to make up for that."

One supermarket owner said that volume is down, citing, in part, customers who drive out of town to save money on grocery bills.