Mexico’s Soda Tax is Working

Jun 17, 2015 by

Mexico’s Soda Tax is Working

CAN BEVERAGE PRICING POLICIES REALLY SUPPORT HEALTHY EQUITY? READ THE LATEST FROM MEXICO

June 17, 2015

A new study was released this week from the University of North Caroline and the Mexican National Institute of Public Health that evaluated the initial impact of a national tax on sugar-sweetened beverages implemented in 2014. The results? The tax is working.

Much like the United States, Mexico is struggling with a nationwide obesity epidemic – the top causes of death in Mexico and 2013 were obesity-related diseases like cardiovascular disease and diabetes. Sugary drinks are a leading cause of obesity today, and Mexico is one of the world’s top consumer of sugary drinks.

In an attempt to lower consumption of sugary drinks, Mexico implemented a national tax of $0.07 per liter in the beginning of 2014. In the first year of the tax alone, Mexico saw an average reduction of 6% in the amount of sugary drinks purchased. By the end of the year, a 12% reduction was reached.

Those disproportionately impacted by obesity-related disease (the lowest socioeconomic level) saw the greatest decline in sugary drink purchasing, achieving at 17% reduction by the end of the tax’s first year. Although tap water intake wasn’t measured, the study did capture a 4% increase in untaxed beverages such as bottled water.

We at the Childhood Obesity Prevention Coalition have been keeping a close eye on new policies that aim to curb dangerous overconsumption of sugary drinks. COPC director Vic Colman reacted to the overwhelmingly positive early results of Mexico’s tax:

“Terrific news from our public health colleagues in Mexico. Their ground-breaking efforts to institute a national sugary drink tax in 2014 is already showing results! Purchasing is strongly trending downward, especially in the most vulnerable low-income households. Simply making sugary products more expensive via taxes can truly pay health dividends at individual and societal levels, while also providing the greatest dividends to populations that suffer the most from the effects of sugary foods and beverages.”

Here in the U.S., the city of Berkley became the first city in the nation to pass a tax on sugary drinks last year. Previous studies have estimated what the Mexico tax has confirmed – that the price of sugary drinks like soda is elastic and that demand can be decreased with slight price increases.

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