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Sugary drinks tax in Mexico linked with 12% cut in sales

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Staff writer ▼ | January 8, 2016
In Mexico, a 10% tax on sugar sweetened drinks has been associated with an overall 12% reduction in sales and a 4% increase in purchases of untaxed beverages one year after implementation, finds a study published by The BMJ.
Sugary drink
After one year   Important implications for policy discussions
The findings have important implications for policy discussions and decisions, say the researchers.

Mexico has some of the highest levels of diabetes, overweight, and obesity in the world, and reducing the consumption of sugar sweetened beverages has been an important target for obesity and diabetes prevention efforts.

From Jan 1. 2014, Mexico implemented an excise tax of 1 peso per litre on sugar sweetened beverages.

To evaluate the effect of this tax, researchers based in Mexico and the USA studied differences in purchases of sugary drinks before and after implementation.

Using nationally representative food purchase data from over 6,200 Mexican households across 53 large cities above 50,000 inhabitants, they compared predicted volumes of taxed and untaxed beverages purchased in 2014 (post-tax period) with the estimated volumes that would have been expected without the tax, based on pretax trends.

A statistical model was used, which adjusted for several influential factors, including age and sex of household members and socioeconomic status (low, middle, and high), and other contextual economic factors such as employment and salaries where people lived.

Purchases of taxed beverages decreased by an average of 6% in 2014 compared with expected purchases without the tax. Furthermore, these reductions became large over time, reaching a 12% decline by December 2014.

In other words, during 2014 the average urban Mexican purchased 4.2 fewer litres of taxed beverages than expected without the tax.

In contrast, purchases of untaxed beverages were 4% higher than expected without the tax, mainly driven by an increase in purchases of bottled plain water.

This translates to the purchase of 12.8 more litres of untaxed beverages by the average urban Mexican over 2014 than expected.

All three socioeconomic groups reduced purchases of taxed beverages, but the reduction was greatest among households of low socioeconomic status, averaging a 9% decline during 2014 and reaching a 17% decrease by December 2014 compared with pretax trends.


 

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