Will Chicago, Other Cities Follow Philly’s Soda Tax?

Philadelphia’s soda tax seems to be all over the news these days. Beverage companies like Pepsi are complaining that the levy is hurting business, and that they have had to cut jobs and eat lost profits as a result. But, with the eyes of the United States all looking at the City of Brotherly Love as it imposes a 1.5-cent-per-ounce tax on all sodas (diet and regular), sweetened milks, waters, or teas, and sports drinks, it seems that other municipalities are sitting up and deciding that such a tax might just be a good idea. Cook County, Illinois – the home of Chicago – is one of them.

Chicago will be following Philadelphia in taxing sodas and other sugary drinks.

CNBC reports that the success of Philadelphia’s soda tax – the measure brought in $5.7 million in January alone – has inspired Cook County to pass a similar measure, which will take effect in July. Boulder, Colorado and San Francisco are jumping on the bandwagon as well. And Santa Fe, New Mexico is holding a hearing on the subject this week.

If you listen to Big Soda, these taxes can be disastrous. In Philly, sales of Coca-Cola are down 30 to 50 percent. Pepsi isn’t faring any better, seeing a 40 percent decline and out-of-city increases of only 10 to 15 percent. As a result, Pepsi says, it has had to cut about 100 jobs out of 423 in the area. What have we learned from this? The tax isn’t inspiring people to leave the area for their fix of sweet and fizzy; they are simply going without.

Philadelphia passed its controversial soda tax last June. The levy is intended to fund universal pre-kindergarten education, community centers, and schools. Despite the grousing from soda companies, Mayor Jim Kenney insists that the tax is a success so far. It remains to be seen what impact similar taxes in Chicago and elsewhere will have on soda companies’ bottom lines.