Grocer, Distributor Revenue Down Since Soda Tax

It stood to reason that the soda tax was going to have an impact on the sales of sweetened beverages in the city of Philadelphia, but now the first wave of fiscal results are rolling in and the actual results are nothing short of dramatic. Bloomberg reports that, since the levy went into effect January 1st, some grocers and distributors are seeing as much as a fifty percent drop-off in revenue.

Grocers and distributors of sugary beverages are complaining that their revenue is down since the implementation of the soda tax. (Photo: Eric Lynch)

Bloomberg cited the examples of Canada Dry Delaware Valley, a beverage distributor who focuses their business on the Philly area and distributes Canada Dry Ginger Ale, Sunkist, A&W Root Beer, Arizona Iced Tea and Vita Coco, and Brown’s Super Stores, which operates 12 ShopRite and Fresh Grocer supermarkets in the City of Brotherly Love. Canada Dry Delaware Valley reports that business is down 45 percent over the same time period as in 2016, and Brown’s Super Stores is saying that revenue is down 15 percent.

Jeff Brown, chief executive officer of Brown’s Super Stores, told Bloomberg that there has never been a time period where his company has seen any significant losses, let alone the enormous ones they are seeing now. The impact, Brown concludes, is “nothing less than devastating.”

Canada Dry Delaware Valley Chief Operating Officer Bob Brockway said that the loss of revenue will inevitably lead to the loss of jobs. He says that March will see him lay off 30 of his 165 employees, with more cutbacks possible over the summer. In total, Brockway expects that profits will be down by a full third by the time this year is over.

The soda tax is not technically a sales tax, but distributors have unanimously agreed to pass the cost down to customers. This has led to the price of 12-packs and 2-liter bottles of sugary beverages being nearly doubled. The tax doesn’t effect just soda, but sweetened coffees and teas, flavored waters, sports drinks, and diet sodas as well.