Executive Briefings

For Some, Mexico's Tax on Sugary Drinks Leaves Sour Taste

For about a decade now, policy makers and the soda industry have been fighting about the idea of a big soda tax. Proponents say it would fight obesity by reducing consumption of sugary drinks. A leading objection by the industry is that the tax simply would not work.

Those discussions were largely theoretical, because no big city, state or country had passed the kind of tax that advocates wanted. That recently changed. In 2013, Mexico passed a tax right out of the public health literature. And now the theoretical debate is becoming more real. Preliminary data from the Mexican government and public health researchers in the United States finds that the tax prompted a substantial increase in prices and a resulting drop in the sales of drinks sweetened with sugar, particularly among the country's poorest consumers. The long-term effects of the policy remain uncertain, but the tax is being heralded by advocates, who say it could translate to the United States.

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Those discussions were largely theoretical, because no big city, state or country had passed the kind of tax that advocates wanted. That recently changed. In 2013, Mexico passed a tax right out of the public health literature. And now the theoretical debate is becoming more real. Preliminary data from the Mexican government and public health researchers in the United States finds that the tax prompted a substantial increase in prices and a resulting drop in the sales of drinks sweetened with sugar, particularly among the country's poorest consumers. The long-term effects of the policy remain uncertain, but the tax is being heralded by advocates, who say it could translate to the United States.

Read Full Article