RI’s Yacht Club Soda Says Beverage Tax Would Put Them Out of Business After 100+ Years
Sunday, May 06, 2018
Yacht Club Soda President John Sgambato says he fears if a soda tax ever makes it through the RI legislature, he'll be out of business.
"They keep [introducing] it. Eventually they'll sneak it through," said John Sgambato with Yacht Club. "It's just one of those awful circumstances that looms over us."
Sgambato sent out the legislative alert when House Bill 7832, which was introduced by Representatives Maldanado, Tanzi, Barros, Diaz, and Ajello to "create a tax on sugary drinks for the purpose of reducing the demand for those beverages, and discouraging the excessive consumption of, sugary drinks" and was heard this week in committee before being held for further study.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAccording to the legislation, which touts both a reduction in obesity -- and associated costs -- as its goal, "In the case of sugary drinks, research suggests that a 10 percent (10%) increase in their prices may lead to an eight to ten percent (8 – 10%) reduction in sugary drink purchases."
"It would be six dollars a case, which would be on my wholesale end," said Sgambato. "They'd be making more than I do."
Controversial Legislation
Sgambato noted examples in Philadelphia -- and Illinois -- as warning signs.
"They did this in Philly, and [I heard that] families went on welfare," said Sgambato.
In March 2017, the New York Post reported:
Last week, PepsiCo blamed a 43 percent drop in business on the new tax and announced it would be laying off 80 to 100 area employees (out of 423) over the next few months. Similarly, Canada Dry gave pink slips, effective March 5, to 25 of its workers. Retailers are also feeling the pinch, with Jeff Brown, owner of Brown’s Super Stores, saying he expects to ax 300 employees at his company’s six Philadelphia ShopRite stores this spring.
On the plus side, the city reports that it raised $5.7 million, or more than double its forecast, in January alone, from the tax. Some of this money has been used to fund expanded pre-K, and the city fired back at the PepsiCo layoff announcement in part by pointing to the roughly 250 teachers and support staff jobs created under the program.
Sgambato noted in Illinois, however, the Chicago beverage tax was scrapped altogether.
IT MUST have been one of the shortest-lived taxes in the history of Illinois. On October 11th lawmakers of Cook County, which includes Chicago, overwhelmingly voted to repeal the county’s soda tax. It had come into effect on August 2nd, after a delay thanks to a lawsuit by the Illinois Retail Merchants Association, and will cease to exist on December 1st.
From the very start the one-cent-per-ounce levy on sweetened soft drinks was massively unpopular: policymakers claimed it was introduced to protect public health but its main purpose was to plug a $1.8bn hole in the budget.
“Look, it's not just me,” said Sgambato. “Pepsi has the manufacturing facility in Cranston -- they have lots of folks. And there’s another small bottler in Bristol.”
“It feels like a revenue grab -- and it hasn't worked anywhere it happened,” said Sgambato.
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