By Thomas A. Farley
In the publicity about the first month's revenue from the Philadelphia beverage tax and the howls from the soda industry, the key point has been missing: The tax is working.
Children are getting educated in prekindergarten. The city is taking the first steps toward a massive rebuilding of parks, recreation centers, and libraries. Nine community schools are helping students and their families. The city is meeting its revenue projections, and the soda industry says sugary drinks sales have declined.
Mayor Kenney predicted that all of these things would happen. And opponents, at one time or another, claimed that none of them would.
The primary goal of the beverage tax was to pay for these investments in our city's children, families, and neighborhoods. And a secondary goal was to do it in a way that battled back the city's still-growing twin epidemics of obesity and diabetes.
Critics said that you couldn't do both. If people stopped drinking soda, they said, the city wouldn't have sufficient revenue for its programs or, alternatively, if revenue came in at projections, then people weren't significantly reducing their soda consumption.
But with the city's first revenue collections on track to meet annual projections and soda sellers reporting declines, the industry's predictions have been proved wrong, and so they are now shifting to fear mongering on job loss.
The soda industry claims that sales declines are forcing them to lay off hundreds of workers. This same industry spent $10 million and made plenty of misleading claims trying to kill the tax and is now funding a lawsuit against the city over it, so we should be skeptical of any unverifiable numbers they put out. It's particularly tough to accept their claim that they have to lay off workers now, when they are still spending hundreds of thousands on advertising, lobbyists, and lawyers.
While a decline in sugary drink sales is what health experts want and expect, it is not at all a reason to expect business or job losses. In Mexico, a soda tax was followed by a drop in sales of sugary drinks, but that fall was balanced by an even bigger increase in the sales of bottled water and other untaxed beverages. In Philadelphia, how much increased revenue are retailers now making from the sale of bottled water or other alternatives? They haven't told us that.
What is known is that seven in 10 adults in Philadelphia are obese or overweight, and nearly one in six has diabetes. Sugar-sweetened beverages are unquestionably a driving cause of these health problems. Even the new CEO of Coca-Cola says he supports the World Health Organization's recommendations that adults shouldn't consume more than 10 percent of their calories in sugar, which is less than even one 20-ounce soda per day.
If the industry claim of a big dropoff in sales is even partially true, it's a sign that more Philadelphians are following that recommendation, which will improve our city's health. A study from Harvard researchers predicted that over 10 years, responses to Philadelphia's tax would prevent more than 14,000 people from developing obesity and save more than $75 million in health-care costs from reduced rates of obesity and diabetes.
It will take about a year to measure exactly what effect the tax will have on city revenue, beverage prices and sales, and the consumption of different kinds of drinks. More than one group of researchers is studying this, so we will eventually get the full and accurate story, in ways that everyone can verify.
In the meantime, all we can say from the early returns is that the Philadelphia beverage tax is working. With all of the benefits that it brings, that is wonderful news. And that's exactly why Big Soda hates it.