President Peña Nieto proposed a tax on sugary drinks in Mexico, host to the world's highest obesity rate and largest per capita consumption of Coca-Cola beverages.
Mexico’s president, taking aim at sugary drinks as a public health issue, is asking Congress to impose a tax on sugar-sweetened beverages.
If the legislature passes the proposed tax, Mexicans would pay an extra peso (7.6 cents) for every liter of soft drinks, sports drinks, or sugary beverage they buy.
Mexico has the highest rate of obesity of any country with 100 million or more residents, according to a United Nations report issued over the summer, and the incidence of diabetes is soaring, taking 70,000 lives a year.
President Enrique Pena Nieto included the soda tax in an announcement Sunday night of a sweeping tax overhaul designed to collect more revenue, broaden a social safety net, and create what his finance secretary called “a fairer, simpler and more transparent” tax code.
The proposal calls for the tax to be imposed on “flavored beverages as well as concentrates, powders, syrups, essences or flavor extracts.” Soft drinks sold at movie theaters would be exempt.
Alejandro Calvillo, head of the consumer watchdog group Consumer Power A.C., hailed the proposal but said the tax, which he said would amount to about 10 percent of the cost of a soda bottle, should be higher to have a greater impact on public health.
“It’s good that there would be a tax. We have to acknowledge that. But to have a significant impact on consumption of sugary drinks, assessments show that it should be a 20 percent tax,” Calvillo said.
Mexico has the world’s highest per capita consumption of Coca-Cola Co. beverages, with the average Mexican consuming 728 eight-ounce drinks a year in 2011, far above consumption in the United States, where the comparable statistic is 403 similar-sized beverages per year, the company says on its website.
Coca-Cola de Mexico did not respond immediately to a request for comment.
Proposals to tax or limit sizes of sugar-sweetened beverages have gained traction in various parts of the world.
France, Finland, Algeria, and Hungary have all imposed taxes on sugary drinks, and a California state proposal for a penny-per-ounce tax on sodas is under consideration.
New York City Mayor Michael Bloomberg, making public health one of the hallmarks of his tenure, saw his effort to bar restaurants from selling soft drinks in cups larger than 16 ounces shot down in late July by a New York appellate court. Public health experts hailed Bloomberg’s campaign against sugary drinks, while critics derided it as part of an over-reaching “nanny state.”
One public health expert said studies show that a tax on sugar-sweetened beverages in the United States would reduce consumption.
“A 10 percent increase in the price should result in a 10 to 12 percent decrease in consumption,” said Roberta R. Friedman, director of public policy at the Yale University Rudd Center for Food Policy and Obesity.
Friedman said soft drink consumption has been linked to higher incidence of obesity, Type 2 diabetes, cardiovascular disease, dental disease, and gout.
Calvillo said the Mexican government should provide details of how it would spend the 2 billion pesos (about $152 million) likely to be raised by the soda tax. He said some of the money should go toward putting drinking fountains back in schools and public places.
“High consumption of sugar drinks in the nation is highly linked to the lack of drinking water in public places,” Calvillo said.