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Mexico's lower house of Congress gives approval to lower taxes on sugary drinks

Published 20 October 2015

Mexico’s lower house of Congress has given green signal to a proposal to cut down taxes on sugary drinks amidst growing concerns that this may serve as a roadblock to curb increasing obesity problem in the Latin American country.

sugary drinks

Although several study findings have shown that high tax rates on soda drinks has cut down the consumption since January 2014, the finance commission in the Congress gave its approval to the proposal where in the tax would be cut by 50% on sweetened drinks if the sugar content is found to be less than five grams per 100 millilitres, reported The Guardian.

This move is seen as a major incentive for soft drink makers, who will be encouraged to provide low-sugar beverages, according to lawmakers.

However, this move has drawn flak from several public health groups and a few politicians, who accused the lawmakers to have bowed to pressure tactics of drinks manufacturers.

The country is believed to be spending around 70 billion pesos ($4bn) annually on diseases associated with consumption of junk food and soda, reported Yahoo News.

This move is seen as a shock for other countries as Mexico had set an example in January 2014 by imposing a tax of one peso (six cents) per liter on sugary drinks, which led to a 10% increase in the price of soda drinks.

The country also levied tax on high-calorie snacks such as cookies and crisps, The Guardian reported.

A study on tax by researchers of Mexico's National Institute of Public Health and University of North Carolina showed that the tax had led to 6% cut in soda consumption in fiscal 2014.

According to the Rudd Center for Food Policy and Obesity at Yale University, soda consumption is 43 gallons per person annually.

This dependence on soda is due to lack of availability of potable water in several parts of the country.

According to the figures of the National Association of Small Merchants (ANPEC), soda drinks contribute to 35% of sales in corner stores.

According to World Health Organisation, Mexico has the highest obesity rate in the world, with around two-thirds of the population being in the bracket of overweight or obese, Yahoo News reported.


Image: Mexico to pass bill to reduce taxes on sugary drinks. Photo: Courtesy of chayathonwong2000/FreeDigitalPhotos.net.