Soda lobby, others sue to
block Philadelphia's soda tax
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[September 15, 2016]
By Chris Prentice
NEW YORK (Reuters) - The U.S. soda lobby
and small businesses are suing to block Philadelphia's soft drinks tax,
marking the latest clash between the industry and public officials
seeking to boost revenue and combat health epidemics like obesity and
diabetes.
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The American Beverage Association (ABA), which represents Coca-Cola
Co and PepsiCo Inc, kicked off a broadly-anticipated legal challenge
on Wednesday, asking a Pennsylvania judge to enjoin and declare
invalid a new soda tax due to take effect in January, according to
documents filed in Philadelphia County Court.
In June, Philadelphia became the largest U.S. city to approve a
volume-based tax of 1.5-cent-per-ounce on sugar sweetened beverages,
including sodas and juice drinks with less than 50-percent juice.
Voters in San Francisco and at least three other places will vote in
November on whether to impose similar levies.
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ABA and others say the tax violates state law, will "meaningfully
diminish the everyday purchasing power of Philadelphia residents,"
and disadvantage small businesses, according to court documents.
The tax also violates the terms of a federal nutrition assistance
program that sends funds to states, said plaintiff counsel Shanin
Specter of Kline and Specter.
"They end up getting a large chunk of this revenue from the people
who can afford it the least," Specter said in a phone interview.
Health advocates are increasingly focused on sugar, which they said
is linked to obesity and diabetes.
City officials defended their authority to institute the tax, which
is expected to add about $1 to the cost of a 2-liter bottle of soda
and generate over $90 million a year which they plan to spend on
pre-kindergarten programs, community schools and reinvestment in
parks and recreation centers.
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"While it is repugnant that the multi-billion-dollar soda industry
would try to take away these educational and community programs from
the hundreds of thousands of Philadelphians who need them, we were
not surprised by their lawsuit given the ten million dollars they
have already spent opposing the tax," said Mayor Jim Kenney in a
statement.
"I have no doubt we'll be successful in defeating the lawsuit."
This is not the ABA's first attempt to stop such a measure. In 2013,
the group won a lawsuit blocking a New York City plan to keep large
sugary drinks out of restaurants. It is in the midst of a legal
battle with San Francisco, where lawmakers want to require warning
labels on advertisements like billboards.
ABA has said soda is being unfairly singled out.
Other plaintiffs include City View Pizza, the Pennsylvania Beverage
Association and John's Roast Pork.
(Reporting by Chris Prentice; Editing by Simon Webb and Andrew Hay)
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