Distributors say layoffs coming because of Philadelphia soda tax

government solve all problems
I’m sure no one saw this coming…/obvious sarc
From Philly.com: Two months into the city’s sweetened-beverage tax, supermarkets and distributors are reporting a 30 percent to 50 percent drop in beverage sales and are planning for layoffs. One of the city’s largest distributors says it will cut 20 percent of its workforce in March, and an owner of six ShopRite stores in Philadelphia says he expects to shed 300 workers this spring.
“People are seeing sales decline larger than anything they’ve seen up to this point in the city,” said Alex Baloga, vice president of external relations at the Pennsylvania Food Merchants Association.
In response, the city questioned the legitimacy of the early figures and predicted that customers responding to the initial sticker shock by shopping outside the city would return. “We have no way of knowing if their sales figures and predicted job losses are anything more than fear-mongering to prevent this from happening in other cities,” said city spokesman Mike Dunn.
Mayor Kenney harshly rebuked reports of coming layoffs late Tuesday night.
“I didn’t think it was possible for the soda industry to be any greedier,” Kenney said in an emailed statement. “ … They are so committed to stopping this tax from spreading to other cities, that they are not only passing the tax they should be paying onto their customer, they are actually willing to threaten working men and women’s jobs rather than marginally reduce their seven figure bonuses.”
The 1.5-cent-per-ounce tax on sweetened and diet beverages is funding nearly 2,000 pre-K seats this year as well as several community schools. The city hopes it will bring in $92 million per year for the education programs and to in part fund renovated parks and recreation centers.
To hit its annual target, the city needs to collect $7.6 million a month in tax revenue. The first collection was due Feb. 21 but collection information won’t be available until next month.  Early projections from the city’s quarterly manager’s report predict only $2.3 million will come through in the first collection. Dunn says that figure is expected to rise and the city still anticipates hitting its goal for the year.
The city predicted a 27 percent sales decline industry-wide as a result of the tax but early returns from some beverage sellers show higher losses, fueling a resurgence of the anti-soda tax coalition that fought vigorously against the tax last summer.
Bob Brockway, chief operating officer of Canada Dry Delaware Valley, which distributes about 20 percent of the city’s soft drinks, said sales were down 45 percent in Philadelphia. The company will lay off 20 percent of its workforce the first week in March. The distributor is a subsidiary of Honickman Affiliates, owned by Harold Honickman, who helped lead the opposition to the tax last summer.
The 35 jobs on the line include managers, sales people, and drivers, Brockway said. Sales are up about 20 percent in the suburbs, but that hasn’t helped the business break even, he said. On the whole, the company’s sales are down about 30 percent, Brockway said. “We don’t anticipate people coming back,” he said.
The tax, passed in June, went into effect Jan. 1 and is levied on distributors, who have passed it on to retailers.
Jeff Brown, CEO of Brown’s Super Stores, which manages six ShopRite stores in the city, said beverage sales were down 50 percent from Jan. 1 to Feb. 17 compared with the same period in 2016. More concerning, he said, is a 15 percent dip in overall sales at city stores. “People didn’t change what they drink,” Brown said. “They changed where they’re buying it.”
Read the rest of the story here.
DCG

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Dr. Eowyn
Admin
Dr. Eowyn
3 years ago

But this will be ignored by the Left who advocate and install soda taxes, just as they do with the layoffs from minimum wage hikes.

Anonymous
Anonymous
3 years ago
Reply to  Dr. Eowyn

Problems generated by Leftist policies require more Leftist policies to address, of course…comment image

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  Anonymous

Anonymous . . . Great picture!

Auntie Lulu
Auntie Lulu
3 years ago

It is laughable that employers are said to be greedy when the necessity of laying off 20% of their employees comes about. Since when is it the duty of employers to offer jobs so people can maintain their lifestyle . . . when there is no work for them to do. There is only so much sweeping of the warehouses that can even be done. Shame on the mayor of Philadelphia, it was an ill advised plan to try to finance Kindergarten seats on the backs of those who drink soda! It just goes to show how truly S-T-U-P-I-D the… Read more »

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  Auntie Lulu

DCG . . . good article. Thanks.

mgorman
mgorman
3 years ago

The stunning stupidity of elected officials. The mayor is surprised and baffled by the fact that the distributors are passing the tax on to their customers because he thinks they should be paying it themselves. Where do you think businesses get the money to pay their costs, you moron? If you impose an additional cost it becomes part of the cost of doing business and the cost of the final product has to cover that. They can’t print the money. Where did you think it was going to come from? Idiots.

YouKnowWho
YouKnowWho
3 years ago
Reply to  mgorman

Which is why there should be NO tax on businesses. Businesses don’t pay taxes. Their customers are the one’s paying. But the entrenched politicians know they can blame the businesses by calling them greedy and the low information voter will believe it.

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  mgorman

mgorman . . . Thank you for bringing up the most common sense idea . . . “the fact that the distributors are passing the tax on to their customers.” I mean really, isn’t that where all businesses get the money to pay taxes! This is really a no brainer, except when dealing with the left.

Alexa
3 years ago

I hope people are drinking less soda for health reasons too. The tax made my family and friends more aware that we do not need to drink soda nor support stupid legislation placed on the backs of already burdened consumers. We also are now enduring a stupid bag tax under the guise of being more green while they now also ‘re-legalized’ formerly illegal to use plastic bags…lol. It is a false promises tax that may lead to many buying outside of areas to avoid taxed shopping bags. If they would stop their political waste and corrupt hiring, raise giving and… Read more »

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  Alexa

Alexa . . . yours was an excellent contribution to this discussion. I started to NO REUSDE paper bags when shopping when I read an article that indicated that upon inspecting reused grocery bags in a laboratory . . . there was a very high proportion of them that contained E coli bacteria. That was the end of my trying to save the planet by reusing my brown paper bags. I would imagine that the E coli was introduced by grocery clerks who handle the various products that scan and then place in the paper bag. I guess you can… Read more »

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  Auntie Lulu

Sorry, I realized that I forgot to mention one very important fact . . . far to many people DO NOT WASH THEIR HANDS after using the restroom, and I am sure that includes grocery checkers.

YouKnowWho
YouKnowWho
3 years ago

“We have no way of knowing if their sales figures and predicted job losses are anything more than fear-mongering”. Mike Dunn and the rest of the prog/left say that kinda crap because that is their typical M.O. fear mongering is one of THEIR favorite tools along with divide an conquer. Keep the pedal to the Metal. Know and spread the truth. Throw out all the Dinos and Rinos. Either get it done or get out of town. Maybe they can get a cashier job at Wendy’s. Oh, I forgot they got rid of that option too. (FOTM – Wendy’s plans… Read more »

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  YouKnowWho

YouKnowWho . . . yours is an excellent statement. I love the, “Throw out all the Dinos and Rinos.” I think our society would be better off if we could accomplish that very thing.

Alexa
3 years ago

Aunt Lulu great point too about bacteria and e- coli in reused bags. It is unsanitary. Which is why I hate their so called green movement to make us bring old bags to reuse or they tax us. To make us sick. I too think it is unsanitary to reuse bags…for example if we buy meat and carry it in a reusable bag and then bring it back to buy fruits and veggies, imagine the bacteria count on our raw eaten foods and in that bag not to mention as you pointed out due to the grocery attendant contributing to… Read more »

YouKnowWho
YouKnowWho
3 years ago
Reply to  Alexa

Stores don’t pay taxes. They pass them on to the customer. The TAXED ENOUGH ALREADY Party should have made that point already.

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  Alexa

Alexa . . . God Bless you for expanding the thought that I had. I agree 100%, reusing paper bags is a filthy and dangerous habit. Your statement about meats being in a bag (and we all know that uncooked meats just breed bacteria) and then next time having fruit in the bag . . . it’s just a filthy, dirty practice. I am so very sorry that your municipality is taxing you for attempting to follow sanitary practices. As for me, I am just going to continue to demand a new, clean paper bag each and every time I… Read more »

truckjunkie
truckjunkie
3 years ago

They decide to heavily tax something,and the sales drop to 1/2-the LOGICAL thing to do is rescind the tax. The LIBERAL thing to do is DOUBLE the PRICE. The sales will drop again,so raise the price again. Seen it happen again and again over the last 30 years,but I’m sure it’s been happening since Commerce began. Can’t believe they haven’t figured it out yet.

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  truckjunkie

truckjunkie . . . it really does defy reality that the Progressive movement cannot see, or understand what taxes are all about . . . and that it is always the consumer who pays them, businesses do not pay them! It is such a simple concept, I think we have many, many lefties who were dropped on their heads as babies. They evidently never recovered from the injury.

Crazycat
Crazycat
3 years ago

Philadelphia schools don’t need more money. They need less “administration”. The top is so over bloated with useless positions and graft, it’s indescribable. Very little of this tax will benefit schools and children.

Auntie Lulu
Auntie Lulu
3 years ago
Reply to  Crazycat

Crazycat . . . Amen to that. If all the school systems were forced to live within their means, we would not have school systems that are “bloated with useless positions and graft.” I have no doubt that as time goes by less and less money is actually spend for in the classroom teaching.

David
David
3 years ago

This stupid tax reminds me of what mom use to say, ” Don’t cut your nose off to spite your face!” I predicted this tax would send people outside of the city to shop and not just for sweet drinks. I guess the mayor will ban people from Bootlegging sweet drinks in from out side of the city! Maybe some sort of
Border tax. Everybody with a tag living in the city coming back into the city will have their cars searched!

TrailDust
Admin
TrailDust
3 years ago

Yup, DCG, it’s rainbows and unicorns all over. Amazing.