All around the globe, more and more countries are developing health policies aimed at controlling the ever increasing number of medical cases associated with vices. The tax on cigarettes is a very good example of how finance works hand-in-hand with medicine. Following these examples, Mexico’s boosted tithe is tied to fewer fizzy drinks, according to a new study.
We are quite aware of how states aim to control the consumption of certain products such as alcohol or tobacco. Many of them have rallied under a common banner in order to prevent the health risks associated with these products.
However, as we have come to understand, Mexico is the first country in the world that chose to raise the taxes on sugary beverages. The direct result of this novel initiative is that fizzy drinks consumption has decreased by 6 percent, and it is expected to drop even further.
The study which details the effect of high taxes on sugary beverages sale was performed by Mexico’s National Public Health Institute. Researchers working for this project wanted to ascertain how higher taxes may affect the Mexican’s predisposition to consume sugary beverages.
According to Arantxa Colchero, lead author of the study, and a health economist working for the National Health Institute since the government implemented the 1 peso tax for each liter of soda, the rate of consumption has decreased by 6 percent on the 1st of January, 2015.
Moreover, it would seem that the drop rate will be likely to decrease even further than anticipated, as the study pointed out that, during the December run, the rates have reached 12 percent.
In order to see how Mexico’s boosted tithe is tied to fewer fizzy drinks, Mexico’s National Health Institute with the help with the Nutrition Department from the University of Carolina took a closer look at the statistics provided by Mexico’s food panel. The joint team analyzed over 6300 households, from 53 Mexican cities, from January 2012 to December 2014.
The team of scientists found out that although the population is reacting to the high taxes, it would seem that certain segments are more affected that the others. As such, the team discovered that in the case of poorer households, sugary beverage consumption rates plunge even further than in the case of those with an average income.
In conclusion, since the 1 peso increase, there has been a 6 percent decrease in sugary beverage consumption. Moreover, it would also seem that the soda prices have increased by ten percent after the new policy was implemented.
Colchero and her team predict that the sugary beverages consumption rate will drop by 20 percent if the Government will increase the tax by 2 pesos per liter.
The scientists also added that, although taxes are quite effective at controlling such health issues, they should be accompanied by other health policies such as additional labeling and health campaigns.
Another piece of good news is that with the new tax on soda, Mexican have started consuming 4 percent more bottled water.
In the end, it would seem that Mexico’s boosted tithe is tied to fewer fizzy drinks.