It’s been two weeks since Philadelphia approved a 1.5-cent-per-ounce tax on sugary beverages, and the city’s streets are still littered with traces of battle. In South Philly, a Canada Dry truck idles in front of a Rite Aid. Plastered to its roll-up door, a sign declares “No Philly Grocery Tax” in orange-and-black letters. “Prices could more than double,” the sign warns.

Meanwhile, five blocks away, a T-shirt bearing the same warning hangs in the window of Bertolino’s Pharmacy. Owned by the same family since it opened in 1925, Bertolino’s has survived nearly a century of transformation in Philadelphia. Past the aisles of canned vegetables and mac and cheese, deodorant and razors, greeting cards and gift wrap, a back office pays tribute to that history. Black-and-white photos of the store’s early years share the walls with framed feature stories about the store’s success, and a shelf lined with antique medicine bottles lies opposite a wall covered with photos of family and graduates in their mortarboards.

Tom Bertolino, a middle-aged man in a polo shirt and sandals who now runs the store, gestures to a small back room of the office filled with a crates of Sprite, two-liter bottles of Diet Coke, and some Arizona Iced Tea. Under the new tax, he says, that room will be emptied, his soda inventory limited to whatever can fit into the store’s three refrigerated cases currently stocked with technicolored soda and juice. He suspects he won’t need the extra inventory once the price on soda increases at his distributor, because the distributor will pass that tax along to him, and he’ll have to raise prices, too, passing the tax on to the customer. “I’m not going to eat [the tax],” he says. And once customers are paying more for soda, he expects they’ll buy less.

Even as business owners’ thoughts turn to the practical, the potential effects of the soda tax remain murky. Many grocers are still considering whether to absorb the tax or pass it on to their customers. And while Mayor Jim Kenney and his coalition have won a key public health battle that could lead to similar taxes in cities nationwide, Philadelphia is bracing for the same kind of legal challenge that felled New York City’s ban on large fountain sodas. Amid so much uncertainty, it’s hard for anyone to know what comes next.

“We will figure out what the new normal is and go from there,” says Dwayne Wharton, director of external affairs for The Food Trust, a Philadelphia-based nonprofit that advocates for healthy and affordable food access nationwide. He describes the soda tax as “a tremendous victory for the city and public health community,” but acknowledges that a lot of even experts don’t know about how it will play out. Wharton points out that even in Berkeley, California, where voters passed a similar soda tax in 2014, results have varied across the community and are far from conclusive. But there are certain lessons worth drawing from Berkeley’s experience.

Pass-Throughs and State Lines

As is the case in Berkeley, Philadelphia’s soda tax is aimed at distributors, meaning there are various possible outcomes for how the tax burden will be passed along the supply chain. Early studies of the Berkeley tax have shown conflicting results; the National Bureau of Economic Research found that less than half of the price increase was passed along to consumers, while a University of California, Berkeley study found that about 70 percent of the tax was passed through. A U.C. Berkeley media release explained that this variance might be attributed to when, how, and what types of stores were sampled. Soda prices tended to remain lower at chain drugstores, for example, where the tax is more easily absorbed.

There are likely to be similar divisions in Philadelphia, where the bulk of soda is sold at supermarkets, local grocers, beer distributors, and in restaurants. As is the case in Berkeley, many folks here expect to see reports of consumers crossing city lines to avoid whatever portion of the tax that does pass through to the retail level—just as smokers have reportedly done in droves since Philadelphia implemented its cigarette tax in 2014. One employee at Philadelphia’s Moore Beverage says he’s even heard of a New Jersey retailer that has put up signs encouraging Philadelphians to cross the bridge into the Garden State for their soda fixes.  

That enticement is likely to draw in plenty of Philadelphians with access to cars or who live on the edges of the city. After all, Pennsylvania’s strict liquor laws already prompt many to buy their booze in New Jersey or even Delaware. “I’ll pop over the bridge to get my gas, get my cigs, get my liquor, and get my soda now,” Bertolino says, adding, “It doesn’t pay to shop in the city.” He says his cigarette sales dropped by 80 percent after the tax was passed, down to one or two cartons sold a week. He expects about the same from soda.

David McCorkle, president and CEO of the Pennsylvania Food Merchants Association (PFMA), argues that a dwindling customer base would jeopardize the supermarkets and grocers that have opened in Philadelphia in the last decade under the Pennsylvania Fresh Food Financing Initiative. “This is not the kind of urban experiment we expected to be participating in,” he says.

Daniel H. Grace, secretary-treasurer of the Teamsters Local 830, believes that the tax “will be devastating” for his members, too. “We stand to lose as many as 2,000 regional jobs among all area Teamsters locals,” he wrote in a statement to Civil Eats. “Furthermore, the tax is slated to go into effect in January, which is traditionally the slowest time of the year for beverage sales, which means our job losses will be felt almost immediately.”

The future might not be quite so grim, though. University of Pennsylvania professor of business economics and public policy Robert P. Inman told Billy Penn that Grace’s estimate is “off the bounds of realistic.” Still, there’s no certain measure of how many jobs will be lost, if any. That uncertainty breeds understandable concern.