In 2014, Mexico passed a tax on sugary drinks. The country has the highest rate of obesity the world’s biggest countries, and the one-peso-per-liter (around five U.S. cents per quart) tax reduced the sales of sugar-sweetened beverages by almost 6% in its first year. According to a newly released study, the tax was even more effective throughout 2016, proving it as an excellent measure against obesity.
In 2012, 70% of Mexican adults were obese, along with 30% of kids. And while that’s not all down to sweet soda, sugary beverages do increase the risk of diabetes, heart disease, and cancers. They’re so tied up in poor health that some campaigners recommend that sugary drinks should carry health warning labels. In Mexico, says the study. 12.5% of the daily calorie intake comes from added sugars, with most of that (9.8% of the total intake) coming from sweetened beverages.
The study, published in Health Affairs this month, showed that the Mexican tax was fully passed on to consumers. That is, the manufacturers of the drinks didn’t absorb the tax themselves by reducing prices to compensate. And this had the effect of reducing sales by quite a bit–the aforementioned 5.5%. The researchers studied the shopping habits from 6,645 households, each for an average of 41 months, and found that the tax has been very effective in cutting sugar consumption.
In the second year of the tax, consumption dropped 9.7%, almost double that of the first year. The reductions also skewed heavily to poorer people. In the first year, reductions in purchases amongst those in the lowest socioeconomic level were 18.8%, compared to just 6.9% at the highest socioeconomic level. In 2015 that split grew: A 29.3% reduction for the poorest versus a 17.2 reduction for the richest. This rich/poor split fits with patterns elsewhere. A 2016 study showed that a tax on sugary drinks in Berkeley, California had its biggest effects in low-income neighborhoods. As obesity and its released illnesses are often associated with lower incomes, these taxes seem to be having their biggest effect in the places with the highest obesity levels.
So far, say the study’s authors, information about the effects of sugary-beverage taxes is scarce, thanks to the relative newness of the taxes, and the lack of studies. This will change over time, but right now, what little evidence there is points to sugar taxes as being a great way to improve health and make money while doing it.