Syndicate content

Sugar-Sweetened Beverages and Snack Taxes: All Eyes on Mexico (and Hungary)

María Eugenia Bonilla-Chacín's picture
Teresa at her home store, where she sells candies amongst her other wares.

en espanol

A few years ago, authors Peter Menzel and Faith D’Aluisio published “Hungry Planet,” a fascinating book with pictures of what families eat around the world.  The picture from Mexico was revealing.  If you take a brief look, it seems a quite healthy diet, varied and containing lots of fruits and vegetables.  But if you look more closely, you will notice a dozen 2-liter bottles of soft drinks and about two dozen beer bottles at the back of the picture. In addition, in front of two children, there’s a table with sweet breads and other high-calorie snacks.

Sadly, this picture is an accurate reflection of the diets of many households in Mexico, at least in the case of sugar-sweetened beverages (SSB).   According to government reports, about one-fifth of the calories consumed in Mexico come from beverages, most of them from SSB.  Household survey data show that in 2012 about 70% of households bought SSB, up from 50% in 1989.  This is in a country where close to one-third of adults are obese; according to data from the OECD, among its member countries, only the U.S. exceeds this rate.  Similarly, Mexico has the highest prevalence of diabetes among OECD countries.

Why would the Mexican government care about this consumption pattern?  Well, emerging and growing evidence shows that the consumption of SSB increases the risk of overweight and obesity and is associated with chronic conditions such as type 2 diabetes, tooth decay, cardiovascular risks in adults, and other health risks.

Indeed, government public health officials are taking action. As part of a larger public health strategy to fight against overweight, obesity and diabetes, and as part of a major fiscal reform enacted late last year, Mexico has imposed an excise tax on SSB and an 8% tax on high calorie-density snacks of poor nutritional value.

In contrast to tobacco and alcohol taxation, on which a large amount of research has been conducted related to their impact on consumption and health, much less work has been done on the impact of taxes on SSB and unhealthy snacks, specifically related to consumption, obesity levels, and the prevalence of other chronic conditions. Very few countries have enacted these policies, so data are scarce.

Most of the evidence on the impact of these policies comes from the U.S., where several states have sales taxes on SSB and a few states, on unhealthy snacks.  These taxes tend to be low and thus, the impact on overall consumption and health outcomes so far has been limited. However, this research also suggests that larger taxes can have a significant effect on consumption and weight outcomes, particularly among children, low-income populations and people already overweight or obese.

In recent years, a few countries have enacted taxes on SSB and snacks high in sugar and salt. Nauru, Samoa, Fiji, French Polynesia, also confronting a major obesity problem, have enacted taxes on SSB. Among large countries, the U.S., France, Finland and Norway have enacted taxes on SSB and some on unhealthy snacks. Other countries have sales taxes on a limited set of SSB. There are only two large middle-income countries that have recently enacted similar policies: Mexico and Hungary. The latter, with a large percentage of obese adults, enacted in 2011 a tax on SSB, as well as on snacks with high salt and sugar content. 

We will not know the full impact of these taxes for a while, at least in the case of Mexico, since the new tax only became effective on January 1 of this year.  However, data on revenue collected in the first quarter of this year show that these taxes collected similar or higher revenue than expected. Government data on the price index for sodas also show an increase, indicating that producers passed at least part of the tax to the final consumer.

What happens in countries that have enacted these policies in the context of overall strategies to improve diets -- and particularly what happens in Mexico and Hungary -- could inform similar measures around the world.  Thus, those of us working on policies to promote healthy living -- at the World Bank and elsewhere -- have a great opportunity to support the generation and dissemination of evidence on the impact of these experiences, as we have done before with tobacco taxation. 

Many countries have already shown interest in similar policies, including Chile, Brazil and Vietnam.  Our eyes should be on Mexico and Hungary as test cases in the public health movement to fight overweight and obesity.   

Follow the World Bank health team on Twitter: @worldbankhealth. 

Related
Rudd Report: Sugar-Sweetened Beverage Taxes
Robert Wood Johnson Foundation Research Brief
World Bank and Mexico

Add new comment