Sales data shows Mexico sugar tax a failure

17 March 2016

Latest sales data shows Mexico’s 10 per cent tax on sugar-sweetened beverages has been a whopping failure, says FGC CEO Katherine Rich. FGC has released new data which shows that two years after the tax was introduced, sales of sugar-sweetened beverages has dropped by 0.5 per cent – amounting to “not even one sip per person”.

[Below is the graph for sugar-sweetened sodas (x000). A gap of 59.7 million litres between 2013 and 2015.

pic“To put this decline in percentage terms into perspective, it’s a fraction of the 4.7 per cent decline in consumption of carbonated drinks seen in the New Zealand market over the past 12 months – which has occurred without any tax at all.

“Those clinging to the pipedream that the Mexico tax is what success looks like as a public health intervention need to realise that the tiny reduction in litres amounts to not even one sip per person.

“With global trends as they are, the decline is probably what would have been expected from people opting to make other beverage choices without imposing the tax, as in New Zealand’s case.

“Unit sales did drop 3% in 2014 but in 2015 they gained 3%, taking them back basically to previous levels.”

[The graph below shows monthly sales for sugar-sweetened sodas 2013-2015, and how the numbers are now practically back to what they were before the tax. The red line also shows the climb in prices over that period.

monthlyMrs Rich says the only success from the Mexican tax has been a huge boost to the Mexican Government’s coffers.

“They budgeted to receive 12.5 billion pesos in 2014 but collected 18.3 billion. They budgeted 18.3 billion pesos in 2015 and collected 21.4 billion.

“Whether governments use such a tax to raise money from citizens is a decision for local parliamentarians, but to impose it under the pretence that it will make a difference to obesity is nothing more than wishful thinking.

“It’s time for those championing soda taxes as a magical solution to reducing obesity to accept that governments cannot simply tax people slim. It just won’t work.”

View the data here, as also published in FGC's name in Food Navigator Asia.