Some Pepsi products will soon disappear from Philadelphia store shelves in response to the city's soda tax that took effect at the beginning of 2017.
In a letter to retailers, Pepsi said it would stop offering Philadelphia customers the option to buy drinks in sizes larger than 1.25 liters and in multiple drink packages, such as 12-packs.
“Because of the costly Philadelphia Beverage Tax, hard-working, value-oriented families are less able to afford larger package sizes and multi-packs, where the tax burden is the greatest,” Pepsi said in a statement.
The change, expected to take effect by April, also applies to sweetened low-calorie and zero-calorie beverages that are subject to the tax. Besides Pepsi-Cola, other products include Mountain Dew, 7 Up and Sierra Mist, as well as other taxed drinks including Lipton Teas and Gatorade.
"We are offering the products and package sizes working families are more able to afford because we believe this will give our retail and foodservice partners the best chance to succeed in this challenging environment and will minimize the chance of product going out-of-date," ther company said.
A spokeswoman for Mayor Jim Kenney said in an email that no "independent data" proves the tax is negatively affecting Pepsi or other soda sellers.
"No one has independently verified their claims," said the spokeswoman, Lauren Hitt. "Given that they announced 90 plus layoffs at the plant in Reading last fall, it seems like the cause for their struggles is more likely a fall in regional market share than the soda tax. The soda industry is also trending towards smaller sizes."
The soda industry has heavily criticized Philadelphia’s new 1.5-cent-per-ounce tax on sweetened drinks, which is designed to help fund universal pre-K and the restoration of parks, recreation centers and libraries.
A lawsuit filed by the American Beverage Association to stop the tax was defeated in a city court, and an appeal is pending.
Pepsi's competitor Coca-Cola also announced last week that it would ask retailers to "boost availability and in-store visibility of 7.5-oz. mini cans and 1.25-liter bottles in Philadelphia stores" in response to the tax.
“We’ve been offering smaller packages across the country – and here in Philadelphia – not because of cities passing beverage taxes, but because they're what people want,” Coke's regional manager Fran McGorry wrote. “But these steps also are helping our customers navigate the business challenges presented by this tax and helping make our products affordable for consumers.”