Kenney touts tax plan to beverage industry brass

Mayor Kenney (right) and Electricians union leader John Dougherty, here at a previous meeting, conferred with soda industry leaders. Dougherty is not directly involved in this issue but served as an intermediary.
Mayor Kenney (right) and Electricians union leader John Dougherty, here at a previous meeting, conferred with soda industry leaders. Dougherty is not directly involved in this issue but served as an intermediary. (DAVID MAIALETTI / File Photo)
Posted: March 10, 2016

In the political battle that's just begun over his proposal to tax sugary drinks, Mayor Kenney broke bread last Saturday with leaders of Big Soda.

Kenney pitched his proposal directly to some of the most influential people in the soft-drink world during a private lunch meeting in swank surroundings, the newspaper has learned.

In a back room at Lacroix, the French restaurant on Rittenhouse Square, Kenney and three top aides met with local soda mogul Harold A. Honickman, a few representatives of the Coca-Cola Co., and the chief executive of the American Beverage Association. Also present was labor leader John Dougherty, a Kenney political ally.

Lauren Hitt, spokeswoman for Kenney, called the gathering a "courtesy meeting."

The two sides made their cases, with Honickman and the other soda representatives arguing against Kenney's three-cents-per-ounce soda tax and suggesting other revenue sources be used, according to a participant who spoke on condition of anonymity.

By several accounts, Honickman also predicted such a tax would speed the falloff in soft-drink consumption and bring in far less revenue than the administration is predicting.

Kenney - accompanied by his chief of staff, Jane Slusser; the deputy mayor for policy and legislation, Jim Engler; and the deputy mayor for labor, Rich Lazer - detailed why he wants to tax any beverage containing added sugar, including sports drinks and sweetened teas as well as soft drinks. His administration projects the 3-cents-per-ounce tax would bring in $400 million over five years to pay for universal prekindergarten, which he has marked as a top priority, as well as park and recreation-center improvements, a jobs program, so-called community schools, and an investment in the struggling pension fund for city employees and retirees.

Dougherty said the lunch was cordial, "casual," and nearly two hours long. "It was a get-to-know-each-other's-concerns," he said. "It was a cross-checking of facts and information. It was a first meeting to get to a second meeting."

As an Electricians union leader who heads the Philadelphia Building and Construction Trades Council, "Johnny Doc" has no skin in the soda game per se. But he was a key backer of Kenney's mayoral run last year, and portrayed his role as an intermediary between mayor and mogul.

"I have a long-term relationship with Mr. and Mrs. Honickman and, of course, Mayor Kenney, so whatever I can do to facilitate," Dougherty said.

Details of how the meeting came about could not immediately be confirmed. Honickman did not answer requests for comment Tuesday.

Honickman's Pepsi and Canada Dry bottling operations in New Jersey provide nearly 20 percent of the city's soft drinks. Honickman has been ranked among the richest Americans by Forbes magazine for years. In 2014, Forbes placed his net worth at $850 million.

He and his wife, Lynne, are philanthropists with interest ranging from gun control to the arts. They have also been campaign donors to members of City Council, which must ratify any such tax and has twice rejected similar measures.

In 2014 and 2015, the Honickman family gave more than $50,000 to 15 Council candidates, all but one of whom are now in office. As a whole, the industry gave more than $96,000 to Council races in those years, when no soda tax proposal was pending.

The setting of Saturday's meeting - where the menu ranges from foie gras to "Rittenhouse cheesesteak" - is in the Rittenhouse Hotel, where Honickman and his wife live.

Hitt declined to make Kenney available Tuesday to discuss the meeting with a reporter, saying it was a private session. She said such meetings were not unusual for him.

"We're reaching out to all members of the business community to discuss why we're introducing this legislation and the benefits these programs will fund will have for Philadelphia's economy," Hitt said.

Whether the Lacroix lunch helps or hurts the tax's chances remains to be seen. Ed Hazzouri, a lobbyist for the Philadelphia Beverage Association who was not present but was briefed later, said via email, "There were no negotiations regarding the proposed 3-cents-per-ounce soda tax." He said both sides did have a chance to outline their arguments.

He described the industry's stance: "We oppose this discriminatory tax, which will hurt consumers, drive business out of the city, and cripple small neighborhood retailers. It put at risk good-paying jobs. . . . The tax does not provide a reliable or sustainable revenue source for these new programs."

cvargas@phillynews.com

215-854-5520@InqCVargas

comments powered by Disqus
|
|
|
|
|