Dale Ash, Cindy Colville and Hooper Matthews III are used to ups and downs in their family business – Pepsi Bottling Company of Atmore. Every small business experiences good and not-so-good times due to business cycles, the economy, etc.
But when the product you sell – in this case beverages – is singled out by the governor of your state for an additional tax, you do the only thing you can – dig in and fight.
As president of the Alabama Beverage Association, Dale has found herself on the front line. The association is made up of 34 soft drink production plants and distribution facilities located throughout Alabama. All the Alabama bottling companies are independent and most are family-owned. Some are Pepsi, some are Coke. But in this fight, all will suffer if the tax passes and the two competitors have joined forces to look out for the welfare of all.
Dale, Cindy and Hooper have ongoing meetings and conference calls with owners in the other facilities. They met with Governor Robert Bentley in June. They are in the process now of meeting individually with Alabama legislators – not only the local legislators but those all over the state.
The beverage tax is being touted as a potential solution to the general budget shortfall, placing a five-cent tax on every 12 ounces of soda bought. That means the distributors such as Pepsi of Atmore will pay more.
And you, the consumer will pay more – at the store, in the restaurant, at fast food locations, in vending machines, concession stands. And what about those free refills? What happens when the restaurant is having to pay more for the beverages they buy?
So how does this translate at the cash register?
The proposed tax is five cents on 12 ounces. So about 28 cents will be added to a two-liter drink. A 20-ounce drink goes up about a dime. When drinks are on sale and you get four 12-packs for $12 at the local grocery, the tax adds an extra $2.40 for those four cartons.
Keep in mind too the tax also includes juice drinks, sports drinks, fountain drinks, coffee, and teas.
Also, Alabama distributors located near Florida and Georgia will be at an additional disadvantage since those two states do not charge tax on groceries. Tennessee reduced the rate of sales tax on groceries in 2013. Mississippi does tax groceries.
In addition to this new tax on beverages, consumers are already paying a four percent sales tax on groceries which includes beverages in addition to the local taxes of five percent on Pepsi products and other groceries.
“This tax would be devastating for small businesses like us,” Dale said.
Currently Arkansas is the only state with a beverage tax, and efforts are under way now to repeal it.
By the way, the state already receives more than $360 million in taxes paid from the beverage industry – $78.8 million from Alabama sales tax; $91.5 million from retail, attributed to sale of beverages; $190.5 million from beverage industry.
Local legislators Representative Alan Baker and Senator Greg Albritton are strong advocates for the beverage association. One of the most vocal opponents is Representative Jack Williams, R-Vestavia Hills, according to published reports.
“This is a tax on every family in the state of Alabama and I’m not for it,” Williams said.
Williams suggested that the tax would not stop with soft drinks and that it could expand to include power drinks, energy drinks and Kool-Aid. He suggested taxing adult material instead and is drafting a bill to that effect.
“I’m not prepared to tax Pepsi before we start taxing Penthouse and Playboy,” Williams said.
The economic impact to Pepsi of Atmore could be devastating. However, they are not talking about “what if” the tax passes.
Nor have they calculated the money and man hours they have already committed to the cause.
“People think we’re part of Pepsi [the parent company PepsiCo],” Hooper said. “We are independent from the ‘big’ Pepsi company,” he said. “We buy from the parent company, but we are not part of the parent company.”
Dale, Hooper and Cindy are asking the public and businesses to join the fight with them by joining the Stop the Alabama Beverage Tax Coalition. They have membership forms which can be filled out and returned to them and they will forward to the proper person(s). You may visit http://www.stopthealabamabeveragetax.com for more information and to join the coalition.
“We are asking people to sign up and pray,” Dale said. “I mean that sincerely. We are fighting for this company’s life. We’re going at it as if life depended on it … We are committed to this area. We were born and raised here. We create jobs in Atmore. We try to give back. Atmore has been wonderful to our family.”