Pepsi Will Lay Off 100 Workers, Citing Philadelphia Soda Tax

Posted On: 3/1/2017

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TAGS: Philadelphia soda tax, beverage tax, Pepsi layoffs, PepsiCo, Philadelphia soft-drink tax, sweetened beverages tax, Canada Dry Delaware Valley, Teamsters Local Union 830, Daniel H. Grace, vending

PHILADELPHIA -- Blaming a beverage tax that is reducing the area's soda consumption, PepsiCo said it is laying off 80 to 100 workers at distribution plants serving Philadelphia. According to local reports, the layoffs, which represent about 20% of Pepsi's Philadelphia-area workforce, began today and will continue over the next few months.

Philadelphia became the first major U.S. city to apply a soft-drink tax when it approved a levy of 1.5¢ per fluid ounce on sweetened beverages in June. That legislation gave momentum to the anti-soda movement, prompting similar measures in the California cities of San Francisco and Oakland; Boulder, CO; and Cook County, IL, of which Chicago is part. The National Automatic Merchandising Association, which represents the vending industry, is involved in the opposition to beverage taxes in these cities.

By mid-February, when Philadelphia's tax on sweetened beverages was just six weeks old, drink distributors and retailers were reporting a sales drops of as much as 50%. Local distributor Canada Dry Delaware Valley told Bloomberg News that its business fell 45% in Philadelphia in the first five weeks of 2017, compared with the same period last year. The Philadelphia tax has almost doubled the price of 12 packs of cans and two-liter bottles.

Following PepsiCo's layoff announcement, Teamsters Local Union 830 secretary-treasurer Daniel H. Grace issued the following statement today:

"Our worst fears have been realized. Today, PepsiCo announced the devastating layoffs of 80 to 100 employees in Philadelphia as a direct result of the city's onerous and discriminatory beverage tax.

"PepsiCo reported a staggering 43% drop in business in the city since Jan.1, 2017, the day the beverage tax went into effect. Canada Dry is also laying off 25 workers due to a sharp decline in sales because of the tax. Coca-Cola is planning a similarly bleak announcement in the near future. The carnage won't end there.

"The Pennsylvania Merchants Association has already signaled that major layoffs of grocery store workers in the city are inevitable. 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.

"I cannot even begin to calculate the number of my members who now face unemployment as a result of today's news. We predicted this dire outcome from the outset. We pleaded with City Council members and our fellow union brothers and sisters in Philadelphia to stand with us against this outrageous tax, but to no avail. I hope they can live with themselves after knowing that their actions led to the devastation of an industry in the city and the loss of so many family-sustaining jobs."

The International Brotherhood of Teamsters represents 1.4 million workers in the U.S., Canada and Puerto Rico.