Update 1:25 p.m.
The Mayor’s Office says the city earned $5.7 million in soda tax revenue its first month in effect. So how many sugary beverages did we drink in January? And did the tax force Philadelphians to cut back as much as the city expected?
For starters, the $5.7 million in revenue means 380 million ounces of sugary drinks were taxed in January. In terms of 12 oz. cans, that would be about 32 million. With our population of about 1.5 million, that’s about 21 sugary sweetened beverages per person this month.
And if we’re comparing January to recent averages for Philadelphia, soda consumption went down by about 40 percent. According to the Health Department, Philly consumes 7.68 billion ounces of sugary beverages a year, or 640 million ounces a month. The 380 million ounces is about 40 percent less than that average.
A caveat: The tax revenue comes from the number of ounces sold by distributors. It’s possible actual consumption was higher, given many retailers stocked up on sugary beverages in late December so they could avoid paying higher fees to distributors in January. The city has also said the $5.7 million is a preliminary number and could go up, again meaning the consumption rate was likely higher.
Lauren Hitt, communications director for Mayor Jim Kenney, said the city still expects a dropoff in consumption of no more than 27 percent. She said early factors such as non-compliance and payments that have not cleared the bank are influencing the early revenue numbers.
Compared to the earliest projections of the soda industry, this 40 percent dropoff isn’t as significant as anticipated. Back when the soda tax was still going to be a 3-cent levy that didn’t include diet drinks, the anti-soda tax group predicted the decline would be 79 percent and the Mayor’s Office 55 percent.
What does the 40 percent drop-off mean? The distributors and stores that have been saying their sales have declined by up to 50 percent have probably been telling the truth, or at least something close to it. As for the city, it might hope the drop-off doesn’t increase by much in the coming months in order to make its projection of about $90 million in tax revenue for the first year.