Mexico’s Calorie Tax Reduces Consumption

July 6, 2016 Taxation in Mexico

MEXICO CITY – Mexico’s tax on calorie-rich foods appears to have influenced consumers’ shopping behavior, though it is not yet clear if it has improved their diets.

On July 5th the medical journal PLOS Medicine published a new article claiming that taxes on energy dense foods in Mexico led to a reduction in the purchase and consumption of such foods.

In 2014 the government of Mexico enacted a tax of 8 percent on the sale of non-essential foods with more than 275 calories per 100 grams, a move that was aimed at curbing the excessive consumption of snack foods, chips, pastries, and other foods deemed to be unhealthy.

Overall the consumption of the energy-dense foods declined by 25 grams per capita per month, equivalent to a 5.1 percent drop in consumption, compared non-taxed foods.

The new tax had the most significant effect on the consumption by low-income households, which saw 10.2 percent decline in consumption, while mid-income households saw a decline of 5.8 percent.

Conversely, high-income households saw no shifts in their consumption patterns and preferences.

However, it was also shown in the results of the study that there did not appear to be an upward shift in the consumption of un-taxed foods, and, therefore, it is unclear whether households consumed less overall, or shifted their eating patterns in a way which was not encapsulated in the data used for the study.

Photo By: Sonny Abesamis