Soft drink shoppers are experiencing “sticker shock” at steep price hikes on their favorite products after a massive soda tax went into effect in Philadelphia Sunday.
The contentious soda tax secured passage in June but consumers in Philadelphia are still flabbergasted by the price increases the tax is sparking. In some cases, shoppers found that they were paying more for the soda tax than the actual product they were purchasing. The 1.5 cents per ounce tax on sugary drinks is implemented at the distribution level, meaning retailers must choose how much of the cost to pass onto consumers at the shelves. A 12-pack of Lipton Diet Green Tea at a Save-A-Lot in the city is now priced at $8.03, instead the $4.99 it costed in December, reports WPVI.
The revenue from the tax will go to a pre-K program spearheaded by Philadelphia Mayor Jim Kenney.
“The businesses take a hit with profits, and the customers take a hit with their payment, and it’s kind of a lose-lose in Philadelphia right now with this tax,” Mike Maziarz, of Franzones pizzeria, told WPVI.
Some people in the city are getting confused due to the price variations from retailers on different products. Acme passed on the full cost of the tax to consumers, deeming it too costly for the company. Shop Rite is drawing the ire of some residents by posting the pre tax prices on the shelves. Many shoppers said they missed the full price, posted below the pre tax price, only to see they paid much more on their receipt.
“When I read the receipt I’m like, ‘Wait a minute. I paid more in tax than I did for the product,” Chuck Andrews told WPVI. “Which is OK if you had told me.”
Some residents said they are going to start shopping for their beverages out of the city to avoid the onerous tax. The mayor defended the tax Monday arguing it was the choice of the retailers to pass the added costs onto their customers, deflecting responsibility.
A statement from the mayor’s office to WPVI said, “The tax is on the distribution of sweetened beverages from companies like Coca-Cola to dealers like supermarkets, and because it’s not a sales tax…distributors don’t have to pass it on to customers.”
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