Soda Tax Wars: PepsiCo, Inc. to Stop Selling Certain Size Sodas in Philadelphia

Advertisement

PepsiCo, Inc. (NYSE:PEP) is going to stop selling certain sizes of soda in Philadelphia due to its tax on the drinks.

Soda Tax Wars: PepsiCo, Inc. to Stop Selling Certain Size Sodas in PhiladelphiaPepsiCo, Inc. is reportedly planning to stop selling its 2-liter bottles and 12 packs on the city. Instead, the company will start pushing its 1-liter bottles of soda. It hopes this will keep customer interest up and save them money. A 1-liter bottle would save customers 51 cents in taxes when compared to a 2-liter bottle.

The soda tax in Philadelphia ads 1.5-cent-per-ounce to the cost of sugary drinks bought within the city. Recent reports claim that this soda tax has resulted in sales of larger PepsiCo, Inc. drinks decreasing by 50%The Coca-Cola Co (NYSE:KO) has already switched to smaller drink sizes.

“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partners the best chance to succeed in this challenging environment and will minimize the chance of product going out-of-date,” a PepsiCo, Inc. spokesman told Fox News about plans to focus on smaller drink sizes in the city.

PepsiCo, Inc.’s decision to focus on smaller drinks doesn’t just affect its sodas. The tax hits all sugary drinks, such as the company’s Gatorade and Lipton Iced Tea offerings. Jim Kenney, the Mayor of Philadelphia, says that the soda industry was already starting to lean toward smaller drink sizes before the soda tax went into effect.

PepsiCo, Inc. has also cited the soda tax as the reason it is eliminating between 80 and 100 jobs in Philadelphia over the next few months. However, it notes that those jobs could return if the soda tax was gone.


Article printed from InvestorPlace Media, https://investorplace.com/2017/03/pepsico-inc-soda-tax-philadelphia-pep/.

©2024 InvestorPlace Media, LLC