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"Less than three months into Philadelphia's new tax on sweetened drinks, the stakes have escalated: Beverage makers say the measure is hurting sales so much they need to cut jobs, while city officials say the moves are a ploy to get the tax struck down. Some supermarkets opposed to the tax are making a statement by printing out the added cost on receipts and store shelves. The tax began Jan. 1 and is levied on transactions between drink distributors and retailers, but many grocers are passing it on to drinks amid an "Ax the Bev Tax" campaign to kill the measure in court or through repeal...Philadelphia is among the first U.S. cities to implement such a special per-ounce tax. While officials touted it as a way to raise money for pre-K education — not as a health measure as in other cities — some advocates also hail it as a way to fight sugary drink consumption and obesity. For the beverage industry, which has already seen soda consumption decline for several years, overturning the tax in Philadelphia could be critical in sending a message to other cities and stopping the measures from gaining momentum. Soda makers have previously opposed such taxes by warning supermarkets could pass the cost onto other groceries , not just drinks. They also say there's no evidence the taxes work in changing behavior or reducing obesity, since people can still fill up on other calories. In Philadelphia, PepsiCo says sales are down 40 percent compared to a year ago since the 1.5-cent per ounce tax took effect, and it will need to cut 80 to 100 workers...Mayor Jim Kenney's office notes that the law does not require distributors and retailers to pass on the cost of the tax, and says people should be skeptical about the need for layoffs since the business coalition is trying to overturn the tax. "They are literally holding hostage the jobs of hardworking people in their battle to overturn the tax," spokeswoman Lauren Hitt said. The city also said the pre-K program the tax supports has created about 250 jobs...Meanwhile, five municipalities including San Francisco and the county that includes Chicago are preparing to implement their own beverage taxes, while voters in Santa Fe, New Mexico, will decide on a measure in May."

Posted March 17th, 2017