Do Soda Taxes Work?

Mexico decided to tax sugary drinks in 2014 to crack down on obesity. One year later, researchers did a study to find out if the strategy worked.

Based on the results, which was published in the journal BMJ, it did.

"The researchers found that as 2014 progressed, purchases of sugary beverages in Mexico declined more by the month," The Wall Street Journal reported. "While full-year sales were down 6% from the average of the previous two years, in December of 2014 sales were 12% below the previous two Decembers."

Notably, bottled water purchases within the same period increased by 4%.

Back in January 2014, it can be recalled Mexico imposed a 1 peso per liter tax on sugary beverages to help curb the obesity epidemic gripping the nation. The country also implemented other measured that worked towards better health for the population, including healthier school meals and improved food labels that showed nutritional information more clearly, according to The New York Times.

"Public health authorities hailed the findings as the first hard evidence that a nationwide tax could spur behavioral changes that might help to chip away at high obesity rates," the publication said. "Some predicted that other countries that have been looking at Mexico as a test case would follow in the country's footsteps and implement their own taxes on sugar sweetened beverages."

In arriving at these findings, the authors of the study checked data regarding beverage purchases from January 2012 to December 2014 in Mexico, which covers the period before and after the soda tax was put in place.

"During 2014, they reported that the average person bought around four fewer liters of taxed beverages," Time explained. "Overall, the decline in purchasing was most significant among low socioeconomic households."

The researchers, however, said that it's still too early to conclude whether the tax imposition really worked as the study is observational in nature and "cannot prove causality." There are also other factors to consider, such as health campaigns and economic shifts.

Despite this, a number of health advocates find the results encouraging. However, according to Dr. Juan A. Rivera, the director of the Instituto Nacional de Salud Publica's center for research in nutrition, the soda tax must be raised to 20% instead of just 10%.

"In the area of obesity prevention and control, there are not many examples of measures that actually work," he told New York Times.. "But these findings suggest that the tax is working and that it's reducing the intake of sugar sweetened beverages. This is really important for Mexico and for the world."

On the other hand, Organisation for Economic Co-operation and Development (OECD) senior health economist Franco Sassi said that while soda taxes "were not a magic bullet against obesity and that they would not be appropriate for every country," these were necessary in Mexico considering its "alarmingly high" consumption of sugary beverages and obesity rates.

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