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Mexico's Sugary Drink Tax Is Killing Soda Sales

In Mexico, a nation facing a growing obesity crisis, the freedom to eat and drink untaxed sugar was recently taken away, but it may be for the better.

by Nick Rose
Jan 7 2016, 9:00pm

Photo via Flickr user Alan

In the oppressive heat south of the Mexican border, the only thing that tastes better than ice-cold, fizzy cola is freedom—freedom from the shackles of oppressive government taxes on consumer goods.

But in Mexico, a nation facing a growing obesity crisis, the freedom to drink untaxed sugar was recently taken away, though it may be for the better.

Given the plethora of medical issues associated with sugar, it's no surprise that governments around the world are struggling to finding ways to disincentivize consumers who are getting fat and killing their pancreases with cheap and addictive refined sugars.

One of the most maligned, and effective, ways of doing this seems to be aggressive taxation of the sweet stuff.

READ: Soda Is Following in Tobacco's Shady Footsteps

The cynic might say that it makes no sense to tax something as highly addictive as sugar, citing booze or cigarette sales as evidence. But the cynic would be mistaken, according to recent research from Mexico, which suggests that this affront to liberty actually impacts consumption in a positive way.

In a recent study entitled "Beverage purchases from stores in Mexico under the excise tax on sugar sweetened beverages," a team of researchers looked at the impact that 10-percent tax had on consumer behaviour in Mexico.

By measuring sugar consumption in 6,253 households in 53 cities, they reported that the new regulation, which went into effect on in January 2014, was indeed having a beneficial impact on sugar consumption in a country which is facing a growing obesity problem.

More specifically, the nutrition researchers reported a 6-percent decline in purchases of sugar-sweetened beverages and 4-percent increase in untaxed beverages over the course of 2014. Interestingly, the decline in sugary drink purchases also grew over time, reaching a 12-percent decrease by the end of the year that was measured.

READ: Britain Is Aware of Sugar's Dangers But Still Won't Tax It

Other countries, like England, are resisting the urge to tax sugar, despite the a mountain of research pointing to its huge health costs. Besides Mexico, France is the only nation to implement such aggressive measures, but data has yet to be looked at there.

Stateside, there seems to be a slow move toward similar regulation but only in freedom-hating blue states like California, where the first soda tax in the union came into effect in Berkeley in 2014. That law was passed after similar research found that a penny-per-ounce tax instituted nationwide could lead to 8,000 fewer strokes, 240,000 fewer cases of diabetes, and 100,000 fewer cases of heart disease annually.

So enjoy your untaxed sugars while you can, because the tyranny of effective health research may soon be upon our shores.