Why would someone close down a profitable business?
There might be many reasons, but why shouldn’t we believe Jeff Brown when he says he’s shutting his ShopRite in Philadelphia’s Overbrook section because the soda tax drove it into the red?
The city says it doesn’t believe him.
But why should we believe the city when it accuses Brown of “scapegoating” the 1.5-cent-per-ounce soda tax? Why should we believe the city when it says — in the words of mayoral spokesperson Mike Dunn — the soda industry and Brown “have yet to present any evidence that the tax has had any impact on sales.”
We should not believe the city because it is not truthful, Brown says, opening his books for me.
His five Philadelphia ShopRite markets have lost an average 15 percent in sales between 2016, when the tax was implemented, and 2018. The formerly profitable Overbrook store suffered a 23 percent loss, he says, $1 million a year.
If the city doesn’t believe him, it could easily find out.
Just check his sales tax, business privilege, and income tax returns, says an irritated Brown. “All the information they say they don’t have, they do have.”
The industry, too, offered proof, says Anthony Campisi, spokesperson for the Ax the Philly Bev Tax Coalition.
A study it commissioned by St. Joseph’s University professor John Stanton “found that the tax was costing city supermarkets $100,000 a month in lost sales.”
For its part, the city quotes a not-yet-published study by Harvard, Penn, and Johns Hopkins showing no sales harm. That study was funded by Michael Bloomberg’s pro-tax Bloomberg Philanthropies.
Other studies have had varied results.
“Science” aside, the city hit Brown below the belt.
In an email response to a reporter’s soda-tax question, Dunn linked to a news story about Brown’s purchase of a $4.3 million mansion on Rittenhouse Square several years back.
Why was that included? I ask Dunn. ”We thought it was interesting,” he says.
That was a Donald Trump-style gutter tactic.
It wasn’t the first time Mayor Jim Kenney and his happy gang of progressives rolled out class envy and an apparent hatred of success and wealth.
Harold Honickman is a Philadelphia millionaire philanthropist, but also a leader in the bottling industry who fought the largest-in-the-nation soda tax.
Then mayoral spokesperson Lauren Hitt hissed that the industry’s claim it would be hurt by the tax was “particularly difficult to believe given that Mr. Honickman is one of the wealthiest men in Philadelphia."
The city’s “scapegoating” charge seems like projection, coming from an administration that viciously vilified the local, legal soda industry for fighting against being bullied into paying the bill for pre-K. In an unforgettable irony, even while the city was demanding the soda industry pay for pre-K, it was booting soda out of city schools. Let that sink in for a moment.
Also unforgettable: When Mayor Michael Nutter proposed a soda tax, then-Councilman Kenney opposed it. Let that sink in for a moment.
In a budget address, Kenney launched an assault against what he called “Big Soda.”
Kenney said the industry taxes the poor. No, the city taxes the poor heavily, with the regressive soda tax. (The tax actually is on soda distributors, but everyone knew the standard business practice of passing it through to consumers would be followed.)
He claimed bottlers get “seven-figure bonuses.” but went mute when asked to verify that.
In a stunning declaration, Kenney roared that the evil soda industry charges “much, much more than what it costs for them to make the soda.” That is what’s known as “profit,” Mr. Mayor, without which -- hello -- businesses sink.
Kenney doesn’t understand that when taxes go up, sales usually go down. When sales go down, so do profits. When profits turn into losses, owners close their stores.