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Learning from the Mexican Experience with Taxes on Sugar-Sweetened Beverages and Energy-Dense Foods of Low Nutrition

Author

Listed:
  • María Eugenia Bonilla-Chacín
  • Roberto Iglesias
  • Agustina Suaya
  • Claudia Trezza
  • Claudia Macías

Abstract

Mexico faces a major health and economic burden due to the large and increasing number of adults and children suffering from overweight and obesity. More than two-thirds of adults are suffering from overweight or obesity and a third from obesity. The country has the second largest adult obesity rate among OECD countries. Obesity is one of the main risk factors for the development of some non-communicable diseases, especially diabetes and cardiovascular diseases, which are the main causes of healthy life years lost in Mexico. Since these conditions require extended and continuous contact with the health sector and generate large productivity losses, due to premature deaths and workers absenteeism, they also negatively impact the economy of the country. These taxes were not enacted in isolation, but were part of a comprehensive strategy to prevent and control obesity, overweight and diabetes. In addition to fiscal policy and regulation, this strategy included other health promotion and prevention interventions as well as measures to ensure better access to effective health care services. These taxes were not only part of the strategy to prevent obesity, but were also part of a comprehensive fiscal reform aimed at increasing tax revenue and reducing the over reliance on oil in government revenues. It is important to continuously monitor the reduction in consumption and consumption substitution (to healthy or unhealthy substitutes). Fiscal policy used for health promotion purposes is still a controversial issue. These reforms face major risks. They tend to affect a relatively small group of powerful and concentrated businesses with the capacity to fight back. In addition, if the tax is small and there is potential for consumption substitution within the taxed products (that is, cheaper brands, cheaper packages within the same brand, or through promotions) the impact of the tax on the consumption of the unhealthy good could be small.

Suggested Citation

  • María Eugenia Bonilla-Chacín & Roberto Iglesias & Agustina Suaya & Claudia Trezza & Claudia Macías, 2016. "Learning from the Mexican Experience with Taxes on Sugar-Sweetened Beverages and Energy-Dense Foods of Low Nutrition," Health, Nutrition and Population (HNP) Knowledge Briefs 106654, The World Bank.
    • Handle: RePEc:wbk:hnpkbs:106654
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    References listed on IDEAS

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    1. Jeffrey Grogger, 2017. "Soda Taxes And The Prices of Sodas And Other Drinks: Evidence From Mexico," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 99(2), pages 481-498.
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    Cited by:

    1. Christina H Buckton & Chris Patterson & Lirije Hyseni & S Vittal Katikireddi & Ffion Lloyd-Williams & Alex Elliott-Green & Simon Capewell & Shona Hilton, 2018. "The palatability of sugar-sweetened beverage taxation: A content analysis of newspaper coverage of the UK sugar debate," PLOS ONE, Public Library of Science, vol. 13(12), pages 1-15, December.
    2. Andalón, Mabel & Gibson, John, 2017. "The 'Soda Tax' is Unlikely to Make Mexicans Lighter: New Evidence on Biases in Elasticities of Demand for Soda," IZA Discussion Papers 10765, Institute of Labor Economics (IZA).
    3. Andalón, Mabel & Gibson, John, 2018. "The ‘soda tax’ is unlikely to make Mexicans lighter or healthier: New evidence on biases in elasticities of demand for soda," MPRA Paper 86370, University Library of Munich, Germany.
    4. John Gibson & Bonggeun Kim, 2017. "30 Years of Being Wrong: A Systematic Review and Critical Test of the Cox and Wohlgenant Approach to Quality-Adjusted Prices in Demand Analysis," Working Papers in Economics 17/16, University of Waikato.
    5. Rachel Griffith & Victoria Jenneson & Joseph James & Anna Taylor, 2021. "The impact of a tax on added sugar and salt," IFS Working Papers W21/21, Institute for Fiscal Studies.

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