Coke, Pepsi fight soda tax with smaller bottles

Stung by falling sales at Philadelphia stores since the city started taxing soda and other soft drinks last fall, Pepsi and Coca-Cola are selling smaller containers that incur less tax.

Pepsi will be replacing 2-liter bottles with 1-liter bottles, which it called an example of the "products and package sizes working families are more able to afford," spokeswoman Jennifer Ryan told me.

"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partners the best chance to succeed in this challenging environment and will minimize the chance of product going out-of-date," she added.