Soda Industry Fights to Cut Mexico’s Successful Soda Tax

Just when data shows the landmark tax on sugary drinks appears to be working, lawmakers vote for a partial rollback.

(Photo: Flickr)

Oct 22, 2015· 1 MIN READ
Jason Best is a regular contributor to TakePart who has worked for Gourmet and the Natural Resources Defense Council.

If it ain’t broke, weaken it. How else to explain the absurd logic behind recent efforts by lawmakers in Mexico to curtail the country’s landmark soda tax? Not only are legislators working to reduce the tax, but they’re doing so just days after preliminary data was released that showed the tax is working to drive down national consumption of sugary drinks.

Call it a rather bald case of industry influence run amok. Last week, a team of researchers from Mexico’s National Institute of Public Health and the University of North Carolina reported that Mexico’s peso-per-liter tax on sugar-sweetened beverages, which the country passed in 2013, appears to have led to a 6 percent decline in soda sales, a trend that seemed to be gathering steam. Sales of soda at the end of 2014 were down 12 percent compared with the year prior, and sales among the country’s poor, who are disproportionately affected by obesity and other related health effects, fell even more sharply.

The results were so promising that The New York Times editorial board wrote, “The Mexican example should help persuade lawmakers in the United States to consider comparably stiff taxes.”

Fat chance.

Public health advocates who have long pushed for this sort of strong, nationwide tax on soda to successfully curb overconsumption of the liquid candy that’s been repeatedly linked to excessive weight gain had but a moment to savor the news before word got out that Mexican lawmakers were considering a partial rollback. As The Guardian reported, the finance commission in the lower house of the Mexican congress has approved cutting by half the tax on sugary drinks where the sugar content is less than 5 grams per 100 milliliters.

To put the numbers in perspective: Regular Coke has approximately 9 grams of sugar per 100 milliliters, so it would continue to be taxed at the current rate of a peso per liter, effectively raising the price for consumers by about 10 percent. Lawmakers who support chipping away at the tax say that’s the point of the partial tax reduction: to encourage companies like Coke to offer more drinks with less sugar.

But public health advocates aren’t buying it. An ad sponsored by a coalition of public health groups targeting lawmakers puts the question bluntly: “Do you serve the soda industry or public health interest?” It goes on to note that the most-consumed 600-milliliter drink in Mexico with less than 5 grams of sugar per 100 milliliters has 30 grams of sugar—which is still more than the 25 grams of added sugar per day that the World Health Organization has set as the upper limit for healthy consumption.

There’s evidence to suggest that an effective soda tax should be higher, not lower—more like a 20 percent increase in the cost consumers pay. Just when it seemed like Mexico was poised to be a real-world example of the success of soda taxes in defiance of the soda lobby, now it appears the country could serve as an example of the success of the soda lobby in defiance of science and public health.