First Sugar Tax in Mexico Cuts Soft Drink Sales by 6%

Authored by saludmovil.com and submitted by ekser

If you’re the kind of person who has a stubborn little sugar devil perched on your shoulder most of the time, perhaps a visit to Mexico is in order. In January 2014, the Mexican government implemented a tax on sugar-sweetened beverages (SSB), and a new report says the tax has slashed soft drink sales by a whopping 6%. Taxing toxicity—it’s a thing.

In the study, published in the Journal of Nutrition, researchers at the Center for Health Systems Research, National Institute of Public Health, Cuernavaca, say their objective was to analyze the buying patterns of non-alcoholic beverages and water after the tax began. To achieve their analysis, the investigators worked with four rounds of the National Income and Expenditure Surveys: 2008, 2010, 2012, and 2014; by household income, urban and rural demographics, and household composition.

It’s noteworthy that Mexico has high rates of obesity—”more than 70% of the population is overweight or obese—and sugar consumption,” reports The Guardian.

“More than 70% of the added sugar in the diet comes from sugar-sweetened drinks Coca-Cola is particularly popular and holds a place in the national culture, while former president Vicente Fox was the regional head of the company.”

The study’s findings that the authors revealed at the Center for Health Systems Research, National Institute of Public Health, Cuernavaca, showed that after the government imposed the tax, there was a 16.2 percent increase in water purchases by low and middle-income households, in urban areas and among families with adults.

The research also showed a reduction in purchases of sugar-sweetened beverages in lower-income households, residents living in urban areas, and families with children. That last one is significant! Less sugary drinks in homes with kids is a step in the right direction of the overall pursuit of health and wellness.

The city of Berkeley also implemented a sugar tax in November of 2014, the first large sugar tax in the U.S., after which sales of soft drinks dropped by 10% in just one year.

Also, the Berkeley sugar tax raised $1.4 million for child nutrition and community health programs. And just like in Mexico, water purchases increased significantly, by 15.6 %, after the introduction of the tax.

Recently, the World Health Organization (WHO) made a plea to the global community for more sugar taxing as a way to directly combat serious health concerns.

“Reduced consumption of sugary drinks means lower intake of ‘free sugars’ and calories overall, improved nutrition and fewer people suffering from overweight, obesity, diabetes and tooth decay,” the WHO reports.

The WHO also reminds us of the ongoing worldwide obesity epidemic.

“‘Consumption of free sugars, including products like sugary drinks, is a major factor in the global increase of people suffering from obesity and diabetes,’ says Dr. Douglas Bettcher, Director of WHO’s Department for the Prevention of NCDs. ‘If governments tax products like sugary drinks, they can reduce suffering and save lives.’”

nnyx on September 1st, 2017 at 22:56 UTC »

Am I blind, or is this article about a sugar tax so poorly written that they don't tell you what % the tax was?

If anyone cares to know, it's 10% according to this article.

sfo2 on September 1st, 2017 at 19:10 UTC »

A few facts about the 2014 Mexican soda tax. Sources: Euromonitor, Canadean, BMJ, Mexican National Institute of Public health.

That 6% number comes from a study that was done in 2015, and only tells you what happened in 2014 itself - the year the tax went into effect Carbonated soft drinks (e.g. Coke) declined only 1.7% The main hit was on non-carbonated sweetened beverages (declined 17%) - stuff like juice, gatorade, etc. Total demand for soft drinks was back to 2013 levels by 2016. Growth trajectory for soft drinks resumed previous trend as soon as 2015 Diet soft drinks got an immediate boost in 2014 (though they are still a small part of the market) Lots of people seemed to switch to smaller pack sizes (e.g. 12oz cans instead of liter bottles), because the tax was imposed on a per-liter basis. So rather than buy big bottles, people bought more, small cans, because the price of each can went up less. I'm not sure what happened to non-carbonated sugary beverages past 2014, but I believe they kept growing despite the tax

So what did we learn?

The Mexican government loves to tout this as a win, though the lasting effect is pretty unclear The effect was very short lived on many types of beverages, including soda This didn't really affect Coke or Pepsi much at all, since soda drinkers seemed to either keep drinking it, switch to cans, or buy diet soda. What it did do was kill off competition from other beverage types. People who are very price sensitive down to the centavo (likely poorer people) seemed to switch to packages with less expensive taxes imposed, though it's not clear their total consumption declined

So I'm not sure what to say about this tax. I don't think you can really call it a win for public health, because the lasting effect is not really clear. People certainly aren't drinking any less soda, but they are probably drinking a bit less other sugary drinks like juice. I'm a bit concerned that this was sort of a regressive tax whose burden fell heavily on poor people.

That said, I'm personally all for taxing vice. But as with everything, the truth on the ground is way more complicated than the theory.

Doc_shocktopus on September 1st, 2017 at 16:30 UTC »

I'd like to see the healthcare correlation to this tax after the first year.