Mexico may scale back soda tax

Mexico became the first country in the world to tax sugary drinks in 2014 in an effort to fight obesity, but now the country is backtracking on the campaign just as it is starting to show results.

Mexico’s lower house of Congress last week approved a proposal to cut the country’s tax on sugar-sweetened beverages by 50 percent in drinks that have less than five grams of sugar per 100 milliliters.

Supporters of the measure, which now faces a vote in the country’s Senate, say it will encourage beverage companies to sell drinks with less sugar. But public health experts worry the move will scale back the positive effects of the tax.

“This measure weakens the tax and could weaken its effects,” Dr. Juan Rivera Dommarco, adjunct director of nutrition and health at Mexico’s National Institute of Public Health (NIPH), told The Guardian newspaper. “The way to safeguard public health is to increase the tax … then reduce it on the products that have less sugar."

Mexico’s soda tax charges one peso — the equivalent of about 6 cents — per liter (2.11 pints) — of sugar-sweetened sodas, juices and energy drinks. It excludes diet sodas, bottled waters and flavored milk. The tax amounts to about a 10 percent price increase on sugary beverages.

The average Mexican drinks 111 liters of sugary drinks per year, more than the average American, who drinks 103 liters per year, according to a 2015 Euromonitor report. That makes Mexico one of the biggest consumers of soft drinks in world. The country also has an obesity problem, with about 70 percent of Mexicans qualifying as overweight or obese, according to federal data.

Cutting back on sugar-sweetened beverages could help curb the problem. Preliminary studies show that the tax is doing what it is intended to do. Purchases of sugar-sweetened beverages dropped by 6 percent during 2014 as a direct result of the tax, according to the NIPH and the Food Research Program at the University of North Carolina.

“It’s exactly what we thought the tax would do,” Barry Popkin, a professor of nutrition at UNC whose team conducted the research, told The New York Times.

Researchers don’t yet know whether the decline in soda purchases in Mexico has had a direct effect on obesity, or on related illnesses including diabetes.

Lawmakers say the move to cut the tax was meant to appease soda companies.

“Basically, there was pressure from the private sector to push some modifications such as this to be able to reduce the tax,” lawmaker Vidal Llerenas Morales told online news outlet Sin Embargo.