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Here’s How the Mexican Soda Tax is Working Out

January 8, 2016, 10:04 PM UTC
MEXICO-OBESITY
Elementary students in Mexico City line up outside a small convenience store to purchase soft drinks and potato chips. Mexico is now the second fattest nation. The Mexican Health Ministry is attempting to curb its citizens from consumption of fatty foods. (Photo by Frank Ordonez/Charlotte Observer/MCT via Getty Images)
Photograph by Charlotte Observer MCT—Getty Images

In a country that claims to lead the world in childhood obesity, a soda tax appears to be working.

A year after Mexico levied a one-peso tax on sugary drinks in January 2014, relevant soda purchases had decreased by 12%, according to a study published this week in the BMJ. The tax had an even greater impact on low-income buyers, whose purchases of taxed beverages dropped more than 17% within the year. When the tax was first enacted, one of the study’s co-authors, University of North Carolina professor Barry Popkin, told Politico that expected that the tax would decrease soda consumption by 5%.

The Mexican Legislature created the world’s largest soda tax experiment when they designed the tax, as well as a similar one on high-calorie foods, in response to a growing obesity epidemic. In 2012, Coca-Cola (KO) found that Mexico was its favorite country, with the average Mexican drinking 728 cans of Coca-Cola products per year—almost 8 times the worldwide average.

It’s an experiment that’s been closely watched by policymakers and public health advocates in the United States—including former New York mayor Michael Bloomberg, who reportedly contributed $10 million toward Mexico’s plan—who have long argued over the effectiveness of such measures.

But the jury is still out on whether a decline in soda purchases will lead to a healthier Mexico, in which 70% of adults are overweight or obese. As a 2014 study by a health economist at the University of Wisconsin—Madison found, soda taxes are correlated with a decrease in sugary drink purchases, but it’s not clear that they dent overall calorie intake.