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Sun Jan 13, 2019, 10:28 PM

Soda tax takes toll on stores near the Philadelphia's edge

Once again, Philadelphia’s soda tax has hit the news.

This time, the broadside against the tax came from one of Philadelphia’s leading supermarket entrepreneurs, Jeff Brown. He announced that he was going to close one of his stores because of the impact of the tax on business at that store. While only Brown knows why the supermarket will be shuttered, it should surprise nobody that a business located near the edge of the city would bear the brunt of the soda tax’s effect.

Several years ago, I did research for the American Beverage Association on this issue. When it came to business impacts, it was clear that the negative effects would be felt most by firms located on the edge or borders of Philadelphia. Their suburban competitors could sell beverages at lower prices because they were not subject to the tax.

The ShopRite supermarket fits the profile of a firm most susceptible to harm: Beverages are a staple of its business and it is located near the city border.

The tax’s impact on a border supermarket is amplified because it is broadly based. The 1.5-cent-per-ounce tax is not just on sugar-sweetened beverages. Artificially sweetened products — diet products — are also taxed. This raised prices throughout the beverage aisle.

Read more: http://www.philly.com/business/shop-rite-philadelphia-soda-tax-joel-naroff-20190112.html

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