Post Mexico’s sugar-sweetened beverage tax, purchases of levied beverages have fallen 7.6%, says study

By Adi Menayang

- Last updated on GMT

Photo: iStock/Piotr_malczyk
Photo: iStock/Piotr_malczyk

Related tags Tax

Mexico’s sugar tax may have influenced beverage purchase decisions of Mexican households in urban areas, according to a follow up study by University of North Carolina Chapel Hill researchers.

The study​, which broke down Mexico’s urban population by socioeconomic class, also found that households in the lowest socioeconomic level had the largest decreases in purchases of taxed beverages.

This study was conducted by M. Arantxa Cochero, Juan Rivera-Donmarco, Barry M. Popkin, and Shu Wen Ng—the same researchers who authored the widely discussed 2016 British Medical Journal ​paper​ which suggested Mexico’s tax was already successful in curbing sugary beverage consumption only one year after passing—with a few tweaks from the previous one.

“In this study the model controlled for inflation…and we estimated the association of the tax and purchases in two separate models for each of the post-tax years, to allow us to make comparisons to the pretax period,” ​they wrote in their study published in the journal Health Affairs.

Study methodology and findings

Using Nielsen’s Mexico Consumer Panel Services, the researchers extracted sociodemographic variables and information on food and beverages purchased from stores.

In the time period analyzed (270,782 household months for the period January 2012-December 2015), they found that purchases of taxed beverages decreased 5.5% in 2014 and 9.7% in 2015, totalling 7.6% over the period of time after the tax came into effect. The sample size was 6,645 Mexican households in 53 cities whose populations ranged from 50,000 to 8.9 million.

They also broke down the beverages purchased into two groups: Taxed and untaxed beverages. Data of purchases are based on information that households have to keep to participate in the survey, which includes receipts from stores, empty packages, and diaries. The data did not include information on fountain drinks or hot drinks purchased from food service locations.

From the breakdown, they found out that purchases of untaxed beverages, such as bottled water or carbonated diet sodas, increased by 2.1%.

‘Bottom line is, it showed that sugar taxes work’

Like the first study authored by this team of researchers, opinion has been split on whether or not such taxes actually work. The researchers wrote that no causality could be established, and limitations included the difficulty of isolating effects from the tax alone.

“It is possible that the changes in purchases of taxed beverages might be due not only to the elastic nature of the demand for sugar-sweetened beverages—the chances might also be due to increased awareness of the negative effect of the beverages on health,” ​the researchers wrote.

Other influences include a concurrent 8% ad valorem tax put on nonessential energy-dense food, as well as an opposite effect, such as increased marketing efforts by the beverage industry post-tax that may have attenuated the effect of the tax.

Proponents of the beverage tax see it as a step to a bigger shift in purchase behaviour. “The trend line is obviously trending in the right direction, show that indicates that it’s long term,” ​Jim O’Hara, director of health promotion policy for the Center for Science in the Public Interest, told FoodNavigator-USA. “We have experience with tobacco taxes, and we know that over time tobacco taxes decreased consumption.”

American Beverage Association: ‘30,000 Mom and Pop stores were forced to close due in part to the tax’

But William M. Dermody Jr, vice president of policy at the American Beverage Association, told FoodNavigator-USA that the study conflicts with industry and government sales tax receipts data.”

He added: “Thousands of jobs were lost due to the tax; 30,000 Mom and Pop stores were forced to close due in part to the tax, and the obesity rates have not gone down as proponents vowed they would under the tax.

“Meanwhile, beverage companies and the government of Mexico have been working together to combat obesity in ways that encourage people to reduce the calories they get from all foods and beverages. This kind of cooperation between industry and government is a better way to achieve true and lasting change that improves public health.”

Source: Health Affairs

Published online before print February 2017, doi: 10.1377/hlthaff.2016.1231

In Mexico, evidence of sustained consumer response two years after implementing a sugar-sweetened beverage tax

Authors: M. Arantxa Cochero, Juan Rivera-Donmarco, Barry M. Popkin, Shu Wen Ng

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