Philly implemented soda tax in January — now Pepsi employees are feeling the devastating effects

Philly implemented soda tax in January — now Pepsi employees are feeling the devastating effects
In Philadelphia, PepsiCo. announced recently that 80 to 100 employees would be laid off at area distribution centers over the next several months, citing the city's "soda tax." (Photo by Tim Boyle/Getty Images)

Dozens of Philadelphians are about to lose their jobs as a result of Philadelphia’s “soda tax” implemented in January.

PepsiCo. announced last week that 80 to 100 employees would be laid off at area distribution centers over the next several months. According to Philly.com, the company sent notices to the effected employees last week, citing the city’s hefty sweetened drink tax.

The tax, officially implemented on Jan. 1, charges sugary drink distributors — people who sell soda and other sweetened drinks to retailers — 1.5 cents for each ounce of sugary drink sold. That means the cost of the tax is passed down to the consumer. For example, the price of a 12-pack of any sugary drink whether it be soda, tea or juice, could double after the tax is factored in.

“Unfortunately, after careful consideration of the economic realities created by the recently enacted beverage tax, we have been forced to give notice that we intend to eliminate 80 to 100 positions, including frontline and supervisory roles,” Dave DeCecco, a spokesman for PepsiCo., said in a statement.

The soda company employs 423 people in Philadelphia, but DeCecco said the company had no choice but to lay off employees after they saw sales drop by 40 percent in the city for the months of January and February.

Still, Philadelphia leaders are less than remorseful. As soon as news broke that PepsiCo. was laying off employees, the city released a statement attacking the drink company.

“The soda industry sunk to a new low today,” Lauren Hitt, a spokeswoman for the city, said in a statement, Philly.com reported. “They are literally holding hostage the jobs of hard-working people in their battle to overturn the tax.”

“Pepsi reported nearly $35 billion in gross income and $6 billion in profit last year,” she added. “The idea that they can afford to do that but ‘must lay off workers’ should make every Philadelphian very skeptical of whether these layoffs are actually due to the tax.”

Area unions were quick to hit back at the city. Anthony Campisi, a spokesperson for a coalition of unions, retailers, businesses and distributors against the tax, called it “offensive” to attack PepsiCo. for the layoffs.

“It’s the mayor who’s to blame for the economic and human impact of the tax,” he said in a statement. “And it’s offensive to blame the impact on Philadelphia businesses that are no longer sustainable because of it.”

“Our worst fears have been realized today,” Danny Grace, secretary-treasurer for a local Teamsters union, added in a statement, according to Philly.com. “This terrible news, although not surprising, is particularly disastrous for the members of Teamsters Local 830, who rely on a strong soda industry for their livelihoods.”

However, there is some hope. The controversial tax is currently being litigated and could be struck down by the state’s Commonwealth Court next month, Philly.com reported. If that were to happen, DeCecco said the effected jobs would be restored.

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