On Thursday, Philadelphia became the first major U.S city, and only second overall, to pass a tax on sugary drinks.
The 1.5 cent-per-ounce tax was passed by a 13-4 vote by the Philadelphia City Council and will be levied on sodas, sugary drinks such as teas, sports drinks, and energy drinks. Any drink that has more than 50 percent fruit juice, vegetable juice, or milk, will be exempt from the law. The tax seems to be aimed at discouraging people from consuming unhealthy drinks and encouraging them to choose the healthier options.
The law will go into effect on Jan. 1, so remember to stock up while you can. The tax money will allegedlyu go towards pre-Kindergarten programs, community schools, and recreations centers and is expected to raise $386 million over the next five years.
The tax was passed despite heavy opposition from the soda industry who allegedly spent millions of dollars in advertising against the proposal, arguing that the tax would be costly to consumers, and will hurt the poor who are more likely to consume sugary drinks.
"The Philadelphians Against the Grocery Tax" organization released a statement after the ruling was decided, and called the tax “regressive and discriminatory.” They also claimed that it was unconstitutional and promised to fight the tax in courts.
The city council responded that they are “fully prepared for any legal challenges” that will be brought against them.
Back in 2014, Berkeley, Calif. became the first city to pass a tax on sugary drinks, and although there has not been enough time elapsed for any hard evidence, researches are saying that they are seeing evidence that the tax is beginning to work, and that results are showing a drop in sugary drink consumption.
Mexico passed a similar law in 2014 and soda consumption dropped 12 percent by the end of the year.
A soda tax is not a new phenomenon. Over 30 cities and states have tried to pass the tax since 2008, but have always hit a heavy backlash from soda companies who are desperately trying not to lose any more customers. Certain cities, like New York CIty, which recently tried but failed to pass a soda tax to cut down on obesity, have even tried to get around a soda tax by just banning soda drinks over a certain size, but all of those efforts have come to nothing. The New York Times reported back in 2014 that, even without the help of a soda tax, soda sales in the United States dropped more than 25 percent over the last 20 years, causing soda companies to try and stay relevant by diversifying their products to include water, diet drinks, and healthier beverages.
There are concerns about how small businesses will be affected by the soda tax, and many opponents of the tax have pointed out that the small businesses may suffer far more than other buyers. Others though, have argued that small businesses, who are more in-tune with the public demand, have mostly switched to selling healthier drinks because most of the public has moved away from high consumption of sugary ones. It does not seem that small businesses have been hurt in either Mexico, or Berkeley, after they implemented the tax; although it is still too early to have any hard data on that matter. Either way, we may soon be seeing more cities follow suite and begin to have soda taxes of their own.