All Eyes on Mexico’s Soda Tax

January 13, 2014
NACS Online
Researchers, health advocates and the beverage industry are closely watching what happens in Mexico, which recently implemented a new tax on soda and high-calorie foods.
​WASHINGTON – Mexico’s new tax on soda and other high calorie foods could start the clock on calls for similar action in the United States, reports Politico.
William Dietz, former director of the Division of Nutrition and Physical Activity at the Centers for Disease Control and Prevention, believes that it’s only a matter of time before similar policies make their way to the United States.
“I’m convinced that this is going to happen, it’s just a matter of when,” Dietz said in an interview with Politico.
The news source also notes that more than 30 states and cities have attempted to enact soda taxes through ballot initiatives or legislation over the past several years — and every one of them has failed.
Mexico, which surpassed the U.S. as the world’s fattest country, gained assistance from former New York City Mayor Michael Bloomberg in the form of a $10 million grant. Health advocates say that if Mexico’s plan puts “even a small dent in high-calorie consumption,” there will likely be a push within the United States to go down a similar path.
“The Mexico tax is going to have an impact in this country,” Barry Popkin, nutrition and author of “The World Is Fat,” told Politico, adding, “It will cut energy intake, it will cut sugar…The reduction in production and sales will be meaningful.”
While Mexico starts its experiment and a handful of other localities in the U.S. look to do the same, Dietz noted it’s important to look at what impact a sugary drink tax has on consumer-level prices, as there’s always the possibility beverage companies could cut into their profit margin and absorb the tax to keep prices low.
Popkin adds that researchers will be able to measure the impact of Mexico’s new policy because it looks like the cost of the excise tax, which increases the price of a 2-liter soda by about 10%, a cost that passes directly to consumers.
The American Beverage Association notes that Mexico’s tax is not a targeted strategy for tackling obesity.
“This whole thing in Mexico is really not about obesity; it’s about revenue,” Chris Gindlesperger, a spokesman for the American Beverage Association, told Politico. “Overall, Americans don’t support taxes, bans or other restrictions on what to eat and drink.”