Bottling king in the thick of soda-tax fight

In 1990, Harold Honickman was weighing whether to add a new beverage to the lineup at one of his bottling plants. The drink, the brainchild of two New York City window washers and a grocer, was unorthodox, with a glass bottle, a pasteurized product, and an all-natural sales pitch.

But Honickman had a good feeling, so he took a chance - on Snapple.

"I had a philosophy growing up that I wanted to sell all the liquid that a consumer would put into their stomach," Honickman said.

That focus enabled Honickman, now 83, to become one of the nation's largest private bottlers as well as one of the city's richest residents. It also leaves him the most visible opponent of Mayor Kenney's proposed 3-cents-an-ounce sugary-drinks tax.

Honickman's team has beaten similar taxes, here and elsewhere, before.

This time, the fight is liable to be harder, in part because the revenue raised is pegged to projects that seem to resonate with Council members: community schools, universal pre-K, renovations to the city's libraries and recreation centers.

Honickman, facing this fight in his hometown for the third time, looks a decade younger than his age, with a handsome smile and white hair combed neatly over his broad forehead. He is refined, polite, soft-spoken. On this morning, he wore a dress shirt with his initials - H.A.H. - printed on the cuffs.

He has the resources to cut checks for the lobbying effort from his Rittenhouse apartment and dedicate his time elsewhere.

But he won't sit this one out. He has too much at stake.

"They have no idea what they're talking about," Honickman said of the Kenney administration's proposal. "Honestly. Zero."

On his goal of selling everything a consumer would want to drink, Honickman is doing well.

The companies he and family have a stake in bottle or distribute more than 150 million cases per year spanning hundreds of products, including the Pepsi and Canada Dry lineups, Arizona Iced Tea, Nantucket Nectar, Fiji Water, Coors, and Corona.

He distributes about 35 percent of the soft drinks sold in New York City, plus all the Pepsi in Westchester County, N.Y., Long Island, and parts of South Jersey. He holds the franchises for Canada Dry in Philadelphia, Delaware, Baltimore, Washington, Atlantic City, and northern Virginia.

His empire was acquired over more than half a century, starting with a plant in Pennsauken that opened in 1957. Even in his ninth decade, Honickman goes in to work nearly every day, doling out advice to executives and often visiting the bottling floor.

"Management by walking around," said his son Jeff Honickman.

Harold Honickman, who grew up in the city's Wynnefield section, got into the soda market through his father, who worked with Pepsi as a "bottle jobber," someone who helped get new bottlers started by lending them glass.

After Honickman graduated from college and served in the Army, his father's Pepsi connections expressed interest in cutting South Jersey from the Philadelphia franchise. Honickman took over the territory. His father-in-law, a member of the Korman real estate family, built a plant that opened with 21 employees and 15 trucks.

The company grew through acquisition, with Honickman purchasing struggling franchises and turning them around. He also branched out.

"He was one of the first people to recognize, 'I can put a lot more things on my truck,' " said Michael Bellas, CEO of the Beverage Marketing Corp.

Many say he also has an eye for trends.

"If I want to know what the next big thing is, I look closely at the Honickmans' portfolio, and it's likely there," said Susan Neely, president of the American Beverage Association.

Many moves were strategic; others came by chance. Honickman fell into the beer business in 1985 while touring the Coors brewery in Denver with his family.

"Someone came down and said, 'Would you be interested in having lunch with Peter Coors?' " Honickman remembered.

A handshake sealed the deal. Six months later the Honickmans introduced Coors to the East Coast.

The growth spurt also brought pains. In 1992, Honickman paid nearly $2 million in penalties to settle charges that he violated antitrust laws by acquiring Seven-Up Brooklyn Bottling Co. without notifying federal regulators. Jeff Honickman said they wanted to fight the case but settled to stop the clock on a $10,000-per-day fine.

His success has allowed Honickman to amass a striking personal wealth, valued by Forbes Magazine in 2004 at $775 million. Honickman and his wife, Lynne, have used that money to support political causes, including contributions to City Council members, candidates in the last mayoral fray (including Kenney), and more than $50,000 to Judge Kevin Dougherty's recent Supreme Court bid.

The couple are also among the city's most generous philanthropists.

They purchased a photography collection rumored to be worth seven figures for the Philadelphia Museum of Art.

They have made numerous gestures for children, from taking 100 kids from North Philly to the movies and dinner at Christmastime to taking a group of budding entrepreneurs to Wall Street.

And they have given at least $10 million over the years to Project HOME, including funding an education center in one of the city's poorest neighborhoods.

The Honickman Learning Center and Comcast Technology Labs, opened in 2003, offers afterschool programs, summer camps, college counseling, and adult learning classes.

Sister Mary Scullion, who heads Project HOME, has become a close friend. The Honickmans celebrated Easter at her North Philadelphia apartment; she visits theirs in Center City for Jewish holidays.

Scullion said they give more than money. They are invested in the children the center serves, she said.

"Sometimes you'd say the devil is in the details," Scullion said. "But with them, the beauty is in the details."

Honickman sees Kenney's soda tax hurting residents like those the learning center serves, people who own corner stores or who don't have the means to travel for groceries.

"It's a tax against the poor," Honickman said. "It's a regressive tax. The only people you're hurting on this tax are the poor people of Philadelphia, the people who make a living off running a little bodega."

Kenney argues those very communities will benefit, as the revenue funds sorely needed prekindergarten programs and improvements to rec centers and libraries.

The two sides also disagree on who will pay the tax, which comes to 36 cents for a 12-ounce can or $2.04 for a 2-liter bottle.

Honickman said he would pass it all to retailers, and he expects they would pass it to consumers. He has to, he explained, pointing to an audit he commissioned that shows he makes just .0007 cents profit on an ounce of soda sold in the city.

The administration said the tax will be shared among distributors, retailers, and consumers. Lauren Hitt, Kenney's spokeswoman, said the administration questions Honickman's contention that he makes just a fraction of a cent per ounce.

"We also find their claim that they 'simply can't afford it' particularly difficult to believe given that Mr. Honickman is one of the wealthiest men in Philadelphia," Hitt said.

The back-and-forth will only get more intense as Council continues to weigh Kenney's tax plan. Already, it isn't sitting well with some of Philadelphia's elite who have come to know Honickman for his philanthropy.

"There has to be a better way for us to try and figure out how to raise revenue for critically important initiatives than to put this man and this man's business in the crosshairs," said Comcast executive vice president David L. Cohen, who added that he hasn't taken a stance on the tax.

(Jeff Honickman, in addition to his work in the beverage industry, is a director at Comcast.)

Honickman doesn't seem to be bothered in the same way. When told that some argue the industry's opposition to the tax equates to opposition to the programs it would fund, he just smiled.

"I am not criticizing the programs," he said. "I believe in pre-K."

That begs the question: As Kenney looks to tap corporate donors and philanthropists, will Honickman pony up?

"I'm sure I will be asked to write a check for pre-K the way other foundations are," Honickman said. "And I will probably write a check for pre-K."

That is, he clarified, if his industry isn't forced to foot the bill.

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215-854-2730@TriciaNadolny