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Mexico taxes soft drinks, junk food as obesity rates go loco

18 Nov 2013

Mexico has imposed a hefty tax on sugary drinks and junk food in an effort to trim the nation’s bulging waistline, drawing the attention of public health experts worldwide.

Mexico’s Congress has passed a 1 peso-per-litre tax on soft drinks and an 8 per cent levy on fatty foods as the Central American country confronts an obesity crisis that even eclipses that found in the United States.

According to a report by news service Reuters, Mexicans are the world’s greatest soft drink consumers, guzzling on average 707 0.24 litre servings per person each year, compared with an average 701 servings in the United States.

The move makes Mexico the first of the world’s large soft drink markets to impose such a tax, which has been proposed in several countries grappling with the health effects of high calorie diets.

Last year, soft drink companies mounted a successful legal challenge to block a move by New York City Mayor Michael Bloomberg to impose a ban on the sale of large sugary drinks, while early this year the Cancer Council, Diabetes Australia and the Heart Foundation of Australia jointly called for Government to consider imposing a specific tax on sugary drinks.

The idea has been backed by a group of researchers in the United Kingdom, who claim that a 20 per cent levy on sugary drinks would result in up to 250,000 fewer of obese adults in the country, while adding more than $460 million to Government revenue.

The researchers, whose study was published in the British Medical Journal, estimated that a 20 per cent tax on soft drink would cut purchases by around 15 per cent, and by more among price-sensitive younger people.

One of the researchers, Dr Adam Briggs of the British Heart Foundation Health Promotion Research Group, told Sky News: “Sugar sweetened drinks are known to be bad for health, and our research indicates that a 20 per cent tax could result in a meaningful reduction in the number of obese adults in the UK.”

“Such a tax is not going to solve obesity by itself, but we have shown it could be an effective public health measure, and should be considered alongside other measures to tackle obesity,” Dr Briggs said.

But imposing a tax on sugar in drinks could push manufacturers into looking at alternatives, or encourage consumers to spend more on soft drinks and less on other items, including possibly more healthy food.

In Mexico, there are concerns that major drinks manufacturers such as Coke Fesma will simply substitute cane sugar in their drinks with cheaper, high-fructose corn syrup.

Coke Fesma told the market it would pass the tax onto consumers by increase the cost of its products by between 12 and 15 per cent.

Adrian Rollins

Published: 18 Nov 2013