Is Mexico’s sugar tax working

THERE'S BEEN a bit of confusion surrounding the impact of this controversial legislation. Here are both sides of the story so far.

 

YES - Kawther Hashem, nutritionist for Action on Sugar

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More than 30% of the Mexican population are obese and a love of sugary drinks has been held at least partly responsible. The average Mexican drinks the equivalent of 163 litres of sugary drinks a year, or nearly half a litre a day, much greater than the global average. To help curb this astounding amount of consumption and therefore reduce rates of obesity, a 10% tax was implemented on January 1st 2014.

 

It is still early days – and we only have preliminary results – but the first year alone saw a fall in the average sales of taxed sugary drinks by 6%. This reduction increased over the year to reach 12% by December 2014.

 

Interestingly, the fall was greatest among the lowest socioeconomic group, who have less healthy dietary habits – partly because their food choices are determined by price and familiarity. These households reduced their purchases by 9% on average during 2014 and 17% by the end of the year. This will have the greatest direct effect on the future health of this group because they suffer from the greatest economic burden of disease.

 

The Mexican government must now fulfil its promise to use the more than $18 billion pesos (£700m) collected from the tax to prevent obesity and associated diseases, especially through access to drinking water in schools and the installation of drinking fountains.

 

Mexico’s Nutritional Health Alliance wants the tax rate to be increased from 10% to 20% to have a greater effect on the health of the population – a move that has also been recommended by the Pan American Health Organisation, which suggests that in order to significantly reduce consumption the tax should be at least 20%. It would also like to see VAT on bottled water eliminated in containers smaller than 10 litres, to make water cheaper than sugary drinks.

 

NO - Gavin Partington, director general of the British Soft Drinks Association

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Contrary to claims being made by anti-sugar campaigners, including Jamie Oliver, the soft drinks tax in Mexico has not been a success.

 

The preliminary, undisclosed consumption data cited by Oliver and co is not supported by the evidence. According to industry figures the sector saw a 2.5% fall in sales volumes, reducing energy intake from sugar-sweetened beverages by just 6.2 calories per person per day. These stats are also supported by data from the independent retail analyst Kantar Worldpanel, which reports that there has been a decline of just over 2%.

 

Notwithstanding the different economic climate, the reason why a soft drinks tax won’t work here is because it has been tried without success in several other countries – and ones which have much more in common with the UK. Both Belgium and Denmark abandoned plans for a tax in 2013 and evidence from France shows that while sales of soft drinks initially fell after a tax was introduced in 2012 they are now back up to the levels before the tax was introduced.

 

Even the modelling study promoted by Action on Sugar and other health campaigners in the UK suggests that a 20% tax on soft drinks would reduce intake by a mere 4 calories per day.

 

By contrast, the efforts by soft drinks companies including product reformulation, smaller pack sizes and increased promotion of low- and no-calorie drinks have led to 7% reduction in calories from soft drinks in the last three years.

 

So why are Oliver and health campaigners calling for a soft drinks tax when food taxes elsewhere have been shown to only reduce consumption marginally and temporarily with no long-lasting effect on obesity levels?

 

Oliver was clear in his programme that the levy could raise revenue to tackle obesity and diet-related diseases. Ironically, if implemented, consumers’ drinking habits will have to remain the same to rely on this sort of funding.

 

The soft drinks industry recognises it has a role to play in supporting public health objectives and the efforts by soft drinks companies so far are already having a positive effect. The wider food and drink industry should be rightly concerned by the targeting of single ingredients or products to raise government funds.

 

We should all be working together to deliver real behaviour change through education, industry efforts, and most importantly, a holistic approach that addresses overall diet and lifestyle.

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