Effects of Soda Tax

The effects of the Mexican “soda tax,” as it is called in the US, is now being reviewed. In 2013, Mexico passed a tax on soft drinks and certain junk foods. Since then, it has been revealed that soda sales has gone down every year, an average of 6% soda sale reduction in the last year. This is a direct indicator that the “soda tax” has discouraged people from buying soda. As intended, taxes imposed on bottlers and retailers were passed on to the consumers, closing their wallets to soda. Each soft drink were taxed approximately 10% of the original price (1 peso for 1 liter). This excise tax was largely influenced by the tax imposed on cigarettes in the US. The cigarette taxes has successfully reduced the amount of young smokers in the US. Critics have questioned that while soda consumption may have decreased, obesity may have not seen similar trends. Some skeptics speculate consumers may have found an alternative to taxed soft drinks and junk food. Further data must be acquired to prove that this tax has indeed reduced the rate of obesity in Mexico.

Source: Margot Sanger-Katz http://www.nytimes.com/2015/10/13/upshot/yes-soda-taxes-seem-to-cut-soda-drinking.html