• 01.12.16

Mexico’s Soda Tax Is Working (Unless Your Business Is Soda)

Mexico is curbing its soda addiction, and the U.S. can learn from it.

Mexico’s Soda Tax Is Working (Unless Your Business Is Soda)
Soda purchases in Mexico fell by 6% in 2014 and may be dropping further.

In January 2014, Mexico became one of the first countries in the world to introduce a tax on soda. The one peso per liter levy effectively raised prices by 10%, and the measure was contested vigorously by soda manufacturers because it seemed obvious it would hurt sales.


Well, it has. New research, based on data from 50,000 Mexico residents, finds that soda purchases fell 6% over the whole of 2014 and by as much as 12% by December 2014. The reduction was greatest among poorer groups, with an average fall of 9.1% across the year and 17.4% by December. The figures are based on a model that predicts what sales would have been had the tax not been in place.

Flickr user Mike Mozart Follow

Mexicans drink more soda than Americans (163 liters a year in 2011). The nation has the highest rate of diabetes among advanced countries and its obesity/overweight rate is above 70%. Lawmakers felt they needed to do something drastic. As well as soda, they also levied an 8% tax on chips, cookies, candy, and ice cream.

France, Finland, and Berkeley, California, have also introduced soda taxes (Finland’s is a whopping 22 Euro cents per liter). But Mexico’s tax is seen as most relevant to the U.S. and possible taxes here. Campaigners argue levies are the most direct and effective way to reduce obesity.

Sugary drinks have been strongly associated with diabetes, cardiovascular diseases, and some cancers. A 2013 American Heart Association report attributed 180,000 premature deaths globally to sodas, sports drinks and fruit drinks, including 25,000 in the U.S. alone. Maybe there’s something about diet that we should learn from our friends across the border?

About the author

Ben Schiller is a New York staff writer for Fast Company. Previously, he edited a European management magazine and was a reporter in San Francisco, Prague, and Brussels.