Sugar Tax Success in Mexico

Mexico’s Sugar Tax Results

***UPDATED: March 23, 2017*** Researchers have discovered that consumption of sugar-sweetened drinks has dropped an average of 7.6% in the first 2 years of Mexico’s tax. The beverage industry initially claimed that the effect of the tax declined after the first year, however this new study found otherwise.  According to a recent Medscape article, consumption dropped 5.5% in 2014 and 9.7% in 2015. The data shows that poorer households had the largest decrease in consumption (9% in 2014 and 14.3% in 2015). Taxed drinks include carbonated and non carbonated sugar-sweetened beverages and powders in their reconstituted form.  Furthermore, purchases of untaxed beverages, like juices, unsweetened waters and dairy drinks, increased 2.1% during the study period. By the numbers, it appears that the sugar tax is having the desired results.

***UPDATED: June 27, 2016*** Last week, the city of Philadelphia became the first major U.S. city to approve a tax ordinance on soda, and other beverages that include added sugar, and some believe many others will follow suit. Soda has long been a target; full of sugar and chemical components, it’s been linked to obesity, diabetes, heart disease,  oral health conditions and a number of other health concerns. The tax is not only meant to help increase revenue in the city, supporters also claim it will help improve the health of the city’s population. The Philadelphia City Council voted 13-4 in favor of the tax, which will add 1.5 cents per ounce to thousands of products, including just about anything that is bottled, canned or from a fountain that has added sugar. According to a recent Philly.com article, the tax will be levied on distributors, but it’s likely some of those costs will eventually trickle down to consumers. It’s estimated that the tax could add up to 18 cents to the cost of a 12-ounce can, $1 to the cost of a 2-liter, and $2.16 to the cost of a 12-pack. While city officials are enticed by the potential to collect an additional $91 million in tax revenue (which they plan to spend on education), the American Beverage Association is fighting back, vowing to “take legal action to stop it.” In a released statement, they said, “The fact remains that these taxes are discriminatory and highly unpopular — not only with Philadelphians, but with all Americans.” Only time will tell how successful this type of tax is in America.

Study after study have shown the ill effects of sugar on health. Not only can too much sugar be bad for your teeth, it can cause issues with your liver, has been connected with certain kinds of cancer, is a known contributor to the obesity epidemic, and can lead to insulin resistance, which can turn into type 2 diabetes. Several international health organizations have released guidelines about reducing sugar intake, but let’s face it, many choose to turn the other cheek, pleading ignorance to the negative effects of their sugar addiction. Not only do the diseases caused (or contributed to) by sugar cost taxpayers millions of dollars in health benefits and other financial burdens, they are also costing people their lives. Instead of just sitting by and watching their people suffer, some communities and countries are trying to take matters into their own hands, making legislative changes to help promote awareness and save lives. One such country is Mexico, who for the first time, is seeing great change from their bold move just two years ago.

In 2013, Mexican officials passed an excise tax of one peso per liter on nondairy and nonalcoholic drinks that contained added sugar (think soda and sports drinks). According to a recent article from Dentistry Today, the number of purchases of these beverages decreased by 12% by December 2014. That rate equals about 10% of the price of each beverage, and the tax is collected from the manufacturer as opposed to the consumers. However, in order to offset the new tax, the makers of such drinks raised the price by about the same, 10%. The tax is expected to increase every two years to adjust for inflation, which will inevitably cause the price to continue to rise. It is with hopes of improving nationwide obesity, diabetes, and cardiovascular issues that the country passed such legislation, and it appears to be working. In addition to the decline of consumption of sugary drinks, sales of healthier alternatives (bottled water, unsweetened dairy beverages, and fruit juices) have increased by 4%.

The initial success of Mexico’s regulation may lead other nations to follow in their footsteps. The United Kingdom has already been debating a sugar tax after a recent report found that the children there consumer, on average, 3 times the annual recommended amount of sugar.

“Mexico has set a precedent with its commitment to improving the health of its population and it is now imperative that the UK government looks at the findings of this significant research and considers the evidence before it,” stated the president of the British Association of Dental Therapists, Fiona Sandom.

Research conducted in the UK has shown that by reducing free sugar content in drinks with added sugar (including fruit juices) by 40% over 5 years without replacing them with non-nutritive sweeteners could prevent approximately 300,000 cases of type 2 diabetes over 20 years.

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