Mexico’s Soda Tax Cuts Consumption

March 5, 2017 Taxation in Mexico

Soda Tax in mexicoMEXICO CITY – Mexico’s tax on sugary beverages has slackened the country’s thirst for added sugar, and has decreased soda consumption for the second year in a row.

New research conducted by Shu Wen Ng, health economist and a professor at the University of North Carolina in Chapel Hill, has indicated that the recent tax on the sale of sugary beverages in Mexico has significantly cut down the consumption of such drinks.

It is estimated that in 2015 the sale of sugary drinks fell by 9.7 percent, compared to the level that the sales would have been had the tax not been enacted.

In the prior year, the consumption fell by 5.5 percent, bringing the average to the 7.6 per year over the course of the tax so far.

The tax did not have an equal effect on consumers from various socio-economic groups, as consumers from the poorest groups saw a drop in consumption of 12 percent over the two years.

Mexico has led the world in its implementation of a tax on sugary drinks, as an effort to address the country’s growing obesity problem.

It is estimated that as many as 70 percent of adults in Mexico are obese, and that as much as 12.5 percent of an average adult’s daily caloric intake is made up of added sugars.