One of the big questions in the debate over the Philadelphia soda tax is how consumers can avoid the tax if they want to. Mayor Jim Kenney’s administration says people are likely to switch to diet sodas, healthy juices, water and milk if they want to get around paying the 3-cent-per-ounce tax he’s proposed.
Opponents of the tax say those options aren’t readily available, especially in low-income areas of the city where many residents turn to corner stores and small bodegas to do their shopping.
It’s already been established that a soda tax would impact low-income consumers the most. It’s also accepted that areas in cities with higher percentages of wealthy residents have better access to healthy foods. But are there really so few options besides soda and sugary drinks in corner stores that it would be impossible for some consumers to avoid it?
That depends who you ask.
Where the options are
One councilwoman who is staunchly against the soda tax went so far as to say “98 percent” of what’s in smaller stores would be subject to the 3-cent-per-ounce tax under the administration’s plan, which was proposed in order to fund pre-K, community schools and parks and recreation.
“We keep talking about people having a choice, and as I visit Wawa, 7-Eleven and the bodegas, 98 percent of what is in those stores would be taxed,” Councilwoman Maria Quiñones-Sánchez said during a hearing at the end of the May. “And so when we talk about deserts and the options, there is a diet option, there is water, and then there is juice that is three times more expensive.”
Meanwhile, Kenney’s spokeswoman Lauren Hitt said the best data the administration has is from the UConn Rudd Center for Food Policy and Obesity, which shows that among national beverage sales, the proportion of sugary beverages is around 50 percent, with bottled water adding 34 percent and diet beverages 16 percent. Studies also show the vast majority of corner stores in Philadelphia carry diet soda and bottled water.
We wanted to see what these choices are like — specifically at corner stores, gas stations and bodegas — and found that a higher percentage of beverages offered at shops in low-income areas would be subject to a sugary drinks tax. But we also found that alternatives to sugary drinks like soda are readily available, even at smaller shops, and can be comparable in price.
Last week, I went to a Wawa, a 7-Eleven, a gas station, a corner store, a bodega and a grocery store in my area to compare inventory and look at how much of the beverages they offered would actually be taxed. What I found? Most places offer way more bottled water and juice options than expected.
Of the six places, Cousins (the grocery store) had by far the most options. A bodega I went to in the Kensington/ North Philly area had the least. Of the beverages it offered there that I counted, about 70 percent would be subject to tax — still far less than the 98 percent Quiñones-Sánchez suggested, but more than the 50 percent the UConn report suggests.
The data from our experiment
Here’s a look at what we found at each of the shops and stores we visited:
(Note: Beverages were counted based on each variation being its own drink. For example, Coke, Pepsi, Diet Coke and Cherry Coke are all different beverages in this unscientific survey.)
Location: 3901 Aramingo Ave.
Number of beverages offered: 255
Beverages subject to tax: 146, or 57 percent
Number of diet options: 19
Number of water options: 24
Number of healthy juice and tea options: 32
Number of milk options: 34
Location: Near intersection of Front and Girard
Number of beverages offered: 265
Beverages subject to tax: 174, or about 65 percent
Number of diet options: 21
Number of water options: 24
Number of healthy juice and tea options: 37
Number of milk options: 9
Gas station – Girard Gas
Number of beverages offered: 346
Beverages subject to tax: 214, or about 61 percent
Number of diet options: 32
Number of water options: 28
Number of healthy juice and tea options: 47
Number of milk options: 25
Bodega/ corner store – Caroly Grocery
Location: 3rd and Cecil B. Moore
Number of beverages offered: 171
Beverages subject to tax: 122, or about 71 percent
Number of diet options: 4
Number of water options: 9
Number of healthy juice and tea options: 26
Number of milk options: 10
Bodega/ corner store – Fishtown Market
Location: 2328 E. Norris St.
Number of beverages offered: 198
Beverages subject to tax: 117, or about 59 percent
Number of diet options: 17
Number of water options: 18
Number of healthy juice and tea options: 28
Number of milk options: 18
I also checked out Cousins, a good-sized grocery store in North Philly that had hundreds, if not thousands of beverage options. Sorry everyone, but I did not count these. I would still be there counting. The point is: Grocery stores have far more options when it comes to avoiding a sugary drinks tax if it were to be implemented.
That’s why some opponents have said this tax could be most problematic for people who live in one of the city’s food deserts, where a large portion of grocery shopping is done at corner stores and bodegas like the ones above where healthy options are more scarce.
The price point
So what do all these numbers mean? You will be hard-pressed to find a corner store where 98 percent of that store’s beverage options would be taxed under Kenney’s plan. But it’s not inconceivable that 70 or 80 percent of a store’s beverage options could be subject to tax.
When studying the impact the proposed tax could have on low-income communities, it’s also important to look at the price point of individual items and how that could change under the tax. Some have expressed concern that healthier options — like bottled water and juices — are more expensive than their sugary counterparts.
For example, at 7-Eleven, a 16 oz. soda cost $1.85 while the same size bottle of water cost only 99 cents. But who really wants to drink just water all the time? The healthy juices and milk products were more costly, with most of them topping $2 a bottle.
Those options could increase if a bill introduced by Councilwoman Blondell Reynolds Brown passes. Her measure would offer stores a $2,000 tax credit for providing healthy beverage options in their establishment.
For consumers, it will all come down to how distributors pass along the tax. The administration says if it gets its way, its 3-cents-per-ounce tax would be levied on distributors only and Hitt said it can’t predict how much will get passed onto consumers because “we can’t control what free market forces might do along the distribution chain.”
Carl Davis, research director at the Institute on Taxation and Economic Policy, told Billy Penn in May that small convenience stores could raise prices on other products to make up for a potential loss in revenue or an increase in the price of goods they’re selling.
“All that said, this soda tax proposal is novel enough that any answer to this question,” he said, “is going to involve some amount of speculation.”