Philly’s soda tax

Philly soda tax: Pepsi tells grocery stores it won’t offer 2-liters or 12-packs

“No one’s buying the stuff.”

Anne's Place in Fishtown warns customers sodas and other sugar-sweetened beverages will increase in price because of the soda tax.

Anne's Place in Fishtown warns customers sodas and other sugar-sweetened beverages will increase in price because of the soda tax.

Mark Dent/Billy Penn

Update, 2:45 p.m.

Philadelphians will soon no longer be able to purchase 2-liters or 12-packs of Pepsi soda products at local stores, according to grocers.

Managers of two independent Philly grocery stores confirmed they’d received letters from Pepsi saying the company would no longer distribute 2-liters or 12-packs to Philadelphia stores, as of March 20.

“It’s no longer available to us as a city,” said Maria Koutsouradis, manager of Bell’s Market in Northeast Philly. “The customers are not buying it.”

The measure, according to the letter, went into effect March 20, but it’s likely 2-liters and 12-packs will remain available for a few days or weeks until supply runs out.

The letter covers not only the regular soda products like Pepsi, Mountain Dew, Sierra Mist, and Mug root beer, but also “any taxed sweetened beverages” owned by Pepsi. That would include Gatorade, Tropicana, Lipton Iced Tea and others.

Pepsi declined an interview request but responded with a spokesperson’s statement saying the change was due to the sugary beverages tax and that it wanted to offer “products and package sizes working families are more able to afford….We believe this will give our retail and foodservice partners the best chance to succeed in this challenging environment and will minimize the chance of product going out-of-date.  Our full portfolio of beverages in all package sizes will still be available outside the city.”

A manager at another local grocery store, who insisted on anonymity, said the store received the letter, too. He said Pepsi would focus on distributing smaller sizes of its soda products and that its decision was all about “sales and non-sales.”

“They’ve got to try and do something,” the manager said. “No one’s buying the stuff. So they’re going with smaller stuff.

“I guess they’re trying to spur something. They’re an absolutely huge company. I don’t think this city is a blip on their radar to be honest, but for the people who live and work here it’s a shame.”

Koutsouradis said she’s noticed customers fleeing to suburban stores for beverages — as well as other groceries — and she expects that trend to accelerate without Pepsi offering 2-liters or 12-packs.

“We now are on an uncompetitive edge,” she said. “We can’t compete apples to apples.”

This is the second big change Pepsi has made since the soda tax was enacted Jan. 1. It announced earlier this month plans to lay off 80-100 workers at area distribution plants.

Lauren Hitt, communications director for the Mayor’s Office, said “given that they announced 90 plus lay offs at plant in Reading last fall, it seems like the cause for their struggles is more likely a fall in regional market share than the soda tax.” She also noted the industry in general had been trending toward smaller sizes. Coca-Cola has been promoting its 7.5 oz cans and 1.25 liter bottles in Philadelphia.

“This decision is likely part of a national shift they have been making that started well before the beverage tax was passed here,” Hitt said.

In January, the first month the tax went into effect, the city said it earned $5.7 million in tax revenue. Based on average consumption of recent years, the monthly total represented about a 40 percent decrease in consumption. The Mayor’s Office said those numbers were preliminary and expects consumption to have fallen no more than 27 percent.



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