Sugary Drinks Consumption Drops as Taxes Rose



Poor households are the most affected

In Mexico the sugary drinks consumption drops as taxes rose. Since 2014 Mexico is the only country in the world which taxes the sugary drinks in an attempt to curb consumption which, according to specialists, leads to obesity, diabetes and associated diseases.

A tax of 1 peso (about 6 cents) per liter has been imposed starting January 1, 2014. That is an increase of about 10 percent of the price before the new tax. A report published yesterday in the British Medical Journal analyzed the data from the last two years and found out that the sales of sugary drinks decreased by 6 percent at national level.

The decline peaked in December 2014, reaching 12 percent. Correlated with the fact that the consumption dropped the most among poor households, this might mean that during a period of high expenses related to the holidays more poor people did not afford to purchase juice for the Christmas table.

However, health economist at the Mexican Public Health Institute, Aranxta Colchero, the lead author of the study, still believes that it is a good example as the tax has proved to be working so it could also be implemented in other countries.

The study has been a joint effort of researchers from the Mexican Public Health Institute in collaboration with the Department of Nutrition at the University of North Carolina. Researchers have analyzed data gathered by the Consumer Panel Services of Mexico on purchases of food and drinks by over 6,200 households in 53 medium and large cities of Mexico between Jan. 2012 and Dec. 2014.

The results show a decrease of consumption with 6 percent national average compared with estimations of consumptions without the tax. At the same time the purchases of untaxed beverages, like bottled water increased with an average of 4 percent.

Researchers discovered that the most affected by the tax have been the poor households which bought an average of 9 percent less sugary drinks in 2014 and about 17 percent less during December 2014. However it is important to keep in mind that the research analyzed consumption in medium and large cities while in rural areas it might have decreased even more.

Mexican authorities are planning to increase the tax to 2 pesos – so a price increase of about 20 percent, which they say it would make the consumption drop even more. But before this new raise, Colchero claims that the authorities should make sure that potable tap water is available across the country.

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