Households in Mexico decreased unhealthy drink purchases following tax, study finds
December 14, 2018
Households in Mexico that regularly purchased high quantities of sugar-sweetened beverages purchased significantly fewer of those beverages after a 2014 excise tax was implemented, a finding which shows the tax is having a positive impact on the country’s public health, particularly among those who have the least healthful habits.
UNC Gillings School of Global Public Health faculty members Shu Wen Ng, PhD, associate professor of nutrition, and Barry Popkin, PhD, W. R. Kenan Jr. Distinguished Professor of nutrition, are co-authors of the paper, “Did high sugar sweetened beverage purchasers respond differently to the excise tax on sugar-sweetened beverages in Mexico?,” published online Dec. 14 in Public Health Nutrition.
Researchers consulted household purchase data from more than 6,000 households between January 2012 and December 2015 and estimated differences in purchases after the tax was implemented in 2014 for each of the following four groups of purchasers: (1) purchasers of high quantities of the taxed (sugar-sweetened) beverages but low quantities of untaxed (unsweetened) beverages; (2) purchasers of high quantities of both beverages; (3) purchasers of a low volume of both beverages; and (4) purchasers of low volumes of the taxed (sugar-sweetened) beverages but high volumes of untaxed (unsweetened) beverages.
Groups that typically had high purchases of the taxed beverages saw the largest reduction (-18 percent) in those purchases, as well as the largest increase (+12 percent) in purchases of untaxed beverages by 2015, the second year of the tax.
“The results are encouraging because they show that not only did purchases of unhealthier beverages decrease, but also that the purchases of healthier beverages rose, showing that consumers do switch to healthier alternatives if they are made cheaper relative to unhealthier ones,” Ng said.
Ng noted that Mexico has one of the highest rates of noncommunicable diseases, such as diabetes, in the world.
“Many cases of diabetes go undiagnosed, particularly among the poor, who were also more likely to consume high amounts of sugary drinks prior to the tax implementation,” she said. “Discouraging unhealthy sugary drink consumption while encouraging healthier alternatives such as potable water is important for both health and economic reasons. Limited access to health services and insurance means that the economic burden of diseases such as diabetes, which include health care costs and losses in ability to work and live optimally, is very high among the poor.”
Ng said the findings suggest Mexico’s government is willing to use fiscal policy to change consumer behavior in order to improve the country’s public health and to address health and economic disparities. Taxes have real implications for health when used to discourage unhealthy purchases and encourage the healthier substitution.
“We have evidence to show this is working,” said Ng. “More than 40 locations now have passed sugar-sweetened beverage taxes as one of the key components toward moving their population to better health. There is a need to continue this research, as these taxes are implemented in different ways all around the world, to see what is working best for their population’s health and their country’s economy.”
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