City sugary drinks tax has ramifications for small markets

Lobbyists from the soft drink industry are hard at work to defeat Philadelphia Mayor Michael Nutter’s proposal to impose a tax on sugary drinks.

Lobbyists from the soft drink industry are hard at work to defeat Philadelphia Mayor Michael Nutter’s proposal to impose a tax on sugary drinks.

Beverage companies are also waging a grassroots campaign.

Salesmen who help stock the city’s delis and convenience stores with soda have been circulating petitions against the soda tax.

Sam Patel owns Pagano’s Deli near 8th and Market streets. Patel says the two cents per ounce proposal could mean customers would stock up at a cheaper outlet, like a supermarket.

Patel: We offer the convenience so we can put our prices up slightly more than your average retail supermarket. But the downside is we might have to drop our prices if it affects our sales which means that our margins go down as well.

Patel says drinks make up about 20% of his business, but he says the tax could also affect food sales because he would not be able to offer free drink promotions.

Council is debating whether or not to charge a 2 cents per ounce tax on sugary drinks. City officials say the tax would generate $77-million a year.