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Mexican president seeks 10% tax on sugary drinks

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Obesity, diabetes plague country

MEXICO CITY – Mexico’s president, taking aim at sugary drinks as a public health issue, is asking Congress to impose a tax on sugar-sweetened beverages.

If the legislature passes the proposed tax, Mexicans would pay an extra peso (7.6 cents) for every liter of soft drinks, sports drinks or sugary beverage they buy.

Mexico has the highest rate of obesity of any country with 100 million or more residents, according to a United Nations report issued over the summer, and the incidence of diabetes is soaring, taking 70,000 lives a year.

President Enrique Pena Nieto included the soda tax in an announcement Sunday night of a sweeping tax overhaul designed to collect more revenue, broaden a social safety net and create what his finance secretary called “a fairer, simpler and more transparent” tax code.

The proposal calls for the tax to be imposed on “flavored beverages as well as concentrates, powders, syrups, essences or flavor extracts.” Soft drinks sold at movie theaters would be exempt.

Alejandro Calvillo, head of the consumer watchdog group Consumer Power A.C., hailed the proposal but said the tax, which he said would amount to about 10 percent of the cost of a soda bottle, should be higher to have a greater impact on public health.

“It’s good that there would be a tax. We have to acknowledge that. But to have a significant impact on consumption of sugary drinks, assessments show that it should be a 20 percent tax,” Calvillo said.

He also said the Mexican government should provide details of how it would spend the 2 billion pesos (about $152 million) likely to be raised by the soda tax. He said some of the money should go toward putting drinking fountains back in schools and public places.

Mexico has the world’s highest per capita consumption of Coca-Cola Co. beverages, with the average Mexican consuming 728 8-ounce drinks a year in 2011, far above consumption in the United States, where the comparable statistic is 403 similar-sized beverages per year, the company says on its website.

Coca-Cola de Mexico did not respond immediately to a request for comment.

France, Finland, Algeria and Hungary have all imposed taxes on sugary drinks, and a California state proposal for a penny-per-ounce tax on sodas is under consideration.

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