KDP Keurig Dr Pepper Inc

By Mike Esterl 

The Philadelphia City Council approved Thursday a special tax of 1.5 cents per ounce on sweetened beverages, the first large U.S. city to pass such a measure.

The wide-ranging tax will include regular sodas, diet sodas, sports drinks, energy drinks and other nonalcoholic beverages with added sweeteners. It will be levied on distributors and could raise prices by 25% to 30% if passed along fully to consumers.

It represents a major blow to soft-drink giants Coca-Cola Co., PepsiCo Inc. and Dr Pepper Snapple Group Inc. The beverage industry argues such taxes are discriminatory and has spent more than $100 million since 2009 to defeat similar initiatives in more than two dozen cities and states.

The planned tax is slated to go into effect in January and is higher than the penny-per-ounce levy on sugary drinks in Berkeley, Calif., which in 2014 became the first U.S. city to pass such a measure. It's also broader than the Berkeley ordinance, which exempted drinks with noncaloric sweeteners.

The American Beverage Association, which represents major beverage companies, hasn't ruled out challenging the Philadelphia tax in court. It argues the country's fifth-largest city is overstepping its taxation authority.

Write to Mike Esterl at mike.esterl@wsj.com

(END) Dow Jones Newswires

June 16, 2016 15:24 ET (19:24 GMT)

Keurig Dr Pepper (NYSE:KDP)
Historical Stock Chart
From Mar 2024 to Apr 2024

Keurig Dr Pepper (NYSE:KDP)
Historical Stock Chart
From Apr 2023 to Apr 2024