Upping the stakes in soda battle

As more cities mull a soda tax to raise money, the beverage industry marshals its forces.

By Kim Peterson May 20, 2010 2:20PM

The city of Philadelphia has a $130 million gap in its budget, and it needs money fast. That's why the mayor originally suggested a 2-cents-per-ounce tax on soda.

The tax proposal has been pared down to half a cent per ounce, according to Philly.com, but it still isn't sitting well with the soda industry. So the industry has offered a bribe: Can the tax, and the city will get $10 million over two years.

The industry says it will put that money into the Pew Charitable Trusts, and it will fund city programs to promote health and fight obesity, Philly.com reports. So should Philadelphia take the money?

As it turns out, Pew Charitable Trusts doesn't want to get involved. Its president told Bnet it would be inappropriate to play a role.

A soda tax has become a thorn in the side of the beverage industry, which acts quickly whenever a local government considers the idea to help fill a budget. Bnet reports that the American Beverage Association rallies bottling-company workers, store owners and even Teamsters who drive Coca-Cola (KO) and Pepsi (PEP) trucks to fight the idea.

"On some level, the $10 million offer is an attempt to call the mayor’s bluff," writes Bnet's Melanie Warner. The chief executive of Dr Pepper Snapple (DPS) recently said these taxes are really there to fill budget deficits, not to raise money to fight obesity.

At any rate, it doesn't look like this tax is going to pass in Philadelphia. That might be one fire extinguished, but the beverage industry will be fighting similar fires all around the country until the economy roars back.

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