Soda sales soar in Mexico after sugar tax!

The WSJ reports:

Sales of soda are climbing two years after imposed a roughly 10% tax on sugary drinks …

Purchases, however, are rising in Mexico after an initial drop, making the country a key-growth market again for soda giants Coca-Cola Co. and PepsiCo Inc.

Underscoring the resiliency of sugary drinks, the tax of one peso per liter has raised more than $2 billion since January 2014, about a third more than the government expected.

The tax data is the best proxy for sales. So the has raised lots of money but not decreased sales, let alone decreased .

While that public-health campaign is long gone, soda makers continue to advertise their products heavily and say it is unfair to single out something representing less than 10% of daily caloric intake.

In NZ they are just 1.8% of daily calories yet the tax and tax brigade insist a tax on soda drinks would reduce obesity. It would be like trying to reduce alcohol consumption by only taxing vodka.

Coca-Cola Femsa SAB, the country’s largest Coke bottler, said last Wednesday that its Mexican soda volumes rose 5.5% in the first quarter from a year earlier. Arca Continental SAB, the No. 2 Coke bottler, reported soda volumes surged 11%.

The turnaround began last year, when Mexican soda-industry volume rose 0.5% after falling 1.9% in 2014, said data service Canadean.

So as is often the case a small initial impact, that then disappears and reverses.

Antisoda groups aren’t ready to declare the tax a failure and say sales got a boost from unusually warm weather.

Blame climate change!

Even the initial downturn only lowered the average Mexican’s daily caloric intake by 6 to 7 calories, or 0.2%, according to the study.

That is equal to around two extra minutes of walking per day. Yes, seriously.

Comments (20)

Login to comment or vote