Sugar Taxes in Mexico

Consumption of sugar dropped in Mexico after implementation of a sugar tax.[1] It was falling already, but there was a step down, albeit a small one, compared to a counterfactual created by extrapolating previous trends. Demand was most elastic in the lowest income group. Sugar taxes are a tad illiberal, but maybe they can be accepted on the basis that both consumers and the industry (as a whole) would like sugar levels in merchandise to drop. But each individual company is terrified that they will lose market share to competitors if they make the first move. Taxes apply to all products and so keep the playing field level. Some have suggested that taxes have to be quite high (about 20% of the purchase price) to have any material effect, but the effect in Mexico was achieved at levels of about half of this. This week the Chancellor of the Exchequer brought in a sugar tax in the UK. We should track the effects on sugar consumption. Pure, white and deadly, we have done numerous posts on the danger of free sucrose (for example, [2] [3]).

— Richard Lilford, CLAHRC WM Director

Reference:

  1. Colchero MA, Popkin BM, Rivera JA, Ng SW. Beverage purchases from stores in Mexico under the excise tax on sugar sweetened beverages: observational study. BMJ. 2016; 352: h6704.
  2. Lilford R. How Much Sugar is too Much? CLAHRC WM News Blog. 25 September 2015.
  3. Lilford R. More, Yet More, On Pure, White and Deadly. CLAHRC WM News Blog. 31 July 2015.
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3 thoughts on “Sugar Taxes in Mexico”

    1. Thank you for this interesting note Barry, but don’t you think it sounds a bit illiberal – better to be fat and free than a healthy slave? — Richard Lilford, CLAHRC WM Director

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