Philly disputes claim soda tax is hurting businesses

Rob Dubow, Philadelphia's finance director, says the growth of beverage-related businesses has not declined since the city levied a tax on soda and other sweetened drinks.(Tom MacDonald, WHYY)

Rob Dubow, Philadelphia's finance director, says the growth of beverage-related businesses has not declined since the city levied a tax on soda and other sweetened drinks.(Tom MacDonald, WHYY)

Philadelphia officials say the growth of beverage-related businesses has not declined since the city levied a tax on soda and other sweetened drinks. But businesses are disputing the figures leading to the city’s conclusion.

Philadelphia Finance Director Rob Dubow said comparing this year’s second quarter to last year, the businesses selling sugary beverages — from bars and taverns to supermarkets and wholesale grocers — are paying more in wage taxes. Dubow argued that proves those businesses have not lost employees. 

“Growth through the first half of the year was 5.8 percent for the sectors affected by the tax, as opposed to 5.5 for the city as a whole,” Dubow said.

Anthony Campisi with the industry-backed Ax the Bev Tax Coalition claimed those numbers are “artificially inflated” since a number of Acme grocery stores reopened in the city this year after the chain acquired stores that were closed when A&P declared bankruptcy.

“That’s artificially bumping the numbers up,” Campisi said.

Campisi said city residents are going to the suburbs to buy groceries because of the 1.5-cent-per-ounce tax instituted in January to help pay for expanded preschool for 3- and 4-year-olds. 

Jeff Brown, whose family runs a chain of Shop-Rite supermarkets, said his business is down about 15 percent overall in the city and he’s had to lay off more than 200 people because of the tax. His stores outside the city have seen an increase in sales since the tax was implemented, Brown said.

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