July 5, 2016
The first large-scale study of a ‘junk food tax’ enacted in Mexico has revealed that purchases of taxed food items declined during the first year of implementation by 5.1 percent more than what would have been expected based on pre-tax trends.
This change is especially significant in Mexico, where the prevalence of overweight and obesity is more than 33 percent for children and almost 70 percent for adults.
The study, a collaboration between Mexico’s National Institute of Public Health (INSP) and the University of North Carolina at Chapel Hill, is the first rigorous longitudinal evaluation published in a major peer reviewed journal to evaluate the Mexican nonessential food tax.
The full, open access article is titled “First-Year Evaluation of Mexico’s Tax on Nonessential Energy-Dense Foods: An Observational Study,” and was published online July 5 by the journal PLOS Medicine.
Co-authors from the UNC Gillings School of Global Public Health include Barry M. Popkin, PhD, W.R. Kenan Jr. Distinguished Professor of nutrition, and Lindsey Smith Taillie, PhD, research assistant professor of nutrition. Co-authors from the Center for Nutrition and Health Research at the INSP are Carolina Batis, PhD, an alumna of the Gillings School’s nutrition department, and Juan A. Rivera, PhD.
Since January 2014, Mexico has levied an eight percent tax on nonessential foods with an energy density greater than or equal to 275 kilocalories per 100 grams; examples include salty snacks, chips, cakes, pastries and frozen desserts. A related tax of around 10 percent (one peso per liter) applies to sugar-sweetened beverages like soda and flavored juice drinks.
“This is the first rigorous, longitudinal evaluation of a junk food tax with detailed data on both taxed and untaxed foods,” Taillie noted. “The results show that a meaningful junk food tax can significantly impact food purchases.”
To date, there has been very limited research on how larger health-related food and beverage taxes change household food purchases. Using a dataset that followed household food purchases over time, the researchers examined whether purchases of taxed foods showed greater declines in the post-tax period than would have been expected based on trends in the sales of taxed foods prior to tax implementation. They also examined whether post-implementation changes in the purchases of taxed foods were greater among households of low socio-economic status.
The investigators found that the average purchases of taxed foods in 2014 declined by 25 grams per person per month, representing a reduction of 5.1 percent more than would have been expected based on pre-tax (2012 to 2013) trends. As a contrast, during 2014, there were no changes in the sales of untaxed foods.
“Approximately 14 percent of Mexican kilocalorie consumption comes from these taxed foods,” Popkin explained. “That represents great potential for improving the Mexican diet if the tax continues.”
The researchers also learned that households of low socio-economic status had a greater response to the tax, demonstrating larger declines in taxed food purchases than did medium and high socio-economic households.
“This suggests that the junk food tax may help improve the diets of poor households the most,” said Batis. “This is important, because they bear the biggest cost of obesity and diabetes.”
These findings follow research on an earlier, smaller junk food tax introduced in Hungary in 2011. Results from Hungary revealed that a sizable proportion (40 percent) of Hungary’s food manufacturers ultimately reformulated products to fall below the 275 kilocalories per 100 grams limit and thereby avoid taxation.
Key study limitations include the use of self-reported household data, restriction to urban households and the lack of a true control group (as the tax was implemented nationally). However, the study provides an early snapshot of overall shifts in food purchasing one year after tax implementation.
The investigators suggest that future research should explore how these shifts are linked to changes in the nutritional quality of overall diet, and state that “[the] results can orient Mexican policymakers – who every year decide on the continuation of the tax – as well as policymakers from other countries currently considering the implementation of taxes on unhealthy foods.”
This research was supported primarily by funds from Bloomberg Philanthropies (via grants to UNC and the INSP), with additional support from the National Institutes of Health (NIH) (R01DK108148), the Robert Wood Johnson Foundation (71698) and the Carolina Population Center and its NIH Center grant (P2C HD0550924).