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Mexico’s Sugary Drink Tax = Sugar Loaded Drinks ↓ and Water ↑

June 25, 2015
 

Just last year, in an effort to address alarming obesity rates and the damaging health effects of sugary drinks, Mexico implemented a tax of roughly 10 percent on all sodas and sugary drinks, increasing the price by 1 peso (about 7 cents) per liter. Revenue collected is set to go toward installing water fountains in schools and public spaces as well as funding programs to prevent obesity and its associated diseases. Now, a recent study shows the tax is already paying off.

The study, conducted by the Mexican National Institute of Public Health and the Carolina Population Center at the University of North Carolina, Chapel Hill, looked at data on household consumption of beverages in 53 Mexican cities in 2014. The researchers found that purchases of sugary drinks dropped an average of 6 percent in 2014 and even more over the course of the year to reach 12 percent by December 2014. The study adjusted for other factors, such as the overall downward trend in soda consumption, wages, and unemployment.

Researchers also found that consumers didn’t just drink fewer sodas with the tax, but they also drank more water. Specifically, the study showed a 4 percent increase in purchases of untaxed beverages, primarily driven by an increase in purchases of bottled water.

Additionally, sugary drink purchases appeared to decline across all socioeconomic levels. The drop in consumption was most notable, however, among the lowest socioeconomic group. This group drank 9 percent fewer sugary beverages on average in 2014 and a whopping 17 percent fewer by the end of the year.

The 2014 study was funded by Bloomberg Philanthropies and the Robert Wood Johnson Foundation. The next step for the research team is to secure funding to continue measuring the impact of Mexico’s tax in 2015. In the meantime, Mexico's Nutritional Health Alliance plans to lobby the government to increase the tax from 10 percent to 20 percent in order to have greater impact on health. They will also push for the elimination of the value-added tax on bottled water in containers smaller than 10 liters to make potable water more economically accessible than sugary drinks.

The results from the 2014 study are preliminary and currently under peer-reviewed publication. Still, advocates say they see the study's preliminary results as a sign that soda taxes are an effective measure for improving public health.

"It is time for federal, state, and local policymakers to take real action to curb America's rising tide of diabetes and obesity," PreventObesity.net Leader Harold Goldstein, executive director of the California Center for Public Health Advocacy, said in a statement. "A soda tax is a critical step. Mexico has done it for their residents. So can we."

In fact, momentum is already building here in the United States. In November 2014, Berkeley, California, became the first United States city to impose a penny-per-ounce tax on soda and other sugar-sweetened beverages with financial assistance and advocacy support from the American Heart Association. The tax took effect on March 1. As with Mexico’s tax, a portion of the revenue will go toward health programs. In Berkeley’s case, $250,000 has been earmarked for the Berkeley school district’s nutrition education program, delivering a big win in the fight against the obesity and diabetes epidemics. Berkeley is expected to be a trendsetter for the nation.

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