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Under soda tax, beverage sales at chain stores in Philly dropped 51%, new study finds

Laura McCrystal, The Philadelphia Inquirer on

Published in News & Features

The American Beverage Association has spent millions of dollars fighting the tax in Philadelphia and similar taxes proposed or passed in other cities. Its political action committee spent more than $1 million on Philadelphia elections between April 2 and May 6, according to campaign finance filings.

The authors of the new study -- a group of researchers from the University of Pennsylvania, Harvard University and Johns Hopkins University -- said Bloomberg Philanthropies had no role in designing or conducting the study. Its findings are generally consistent with other studies, which have also found that beverage prices increased and sales decreased after the tax took effect, while sales outside the city increased.

The study is one of the only peer-reviewed studies on Philadelphia's beverage tax and uses the largest set of data; researchers analyzed sales data from 291 stores, which they estimate accounted for 25% of beverages sold in the city in 2017.

It examined Philadelphia sales at chain supermarkets, pharmacies, and mass merchandise stores such as Target or Walmart in 2016 compared to 2017. They also compared sales in Philadelphia to those in Baltimore, which has no such tax, and examined sales in stores outside of Philadelphia but near its border.

Here are more of the study's findings:

-- Overall sales at supermarkets did decrease, but mass-merchandise stores and pharmacies did not have reductions in combined sales of food, beverages and household items. This is different from preliminary results -- based on six months of sales data rather than a full year -- presented at a conference in 2017. Then, researchers said that beverage sales had declined but that overall store sales had not suffered as a result.

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-- Researchers found beverage prices increased 0.65 cents per ounce at supermarkets in Philadelphia, 0.87 cents per ounce at mass merchandise stores, and 1.56 cents per ounce at pharmacies.

-- The price increases also varied by beverage size and type. Sugar-sweetened beverage went up 0.61 cents per ounce; artificially sweetened beverages, 0.80 cents.

-- There were also small price increases for beverages at stores outside the city. "This may be because stores on the border, facing reduced competition from Philadelphia, increased their prices," researchers wrote.

-- Supermarkets had larger volume decreases than other store types ? maybe, researchers said, "because they displayed more in-store signage about the tax" or because changes in shopping behavior varied by store type.

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