Mexico's Soda Tax Success

Pricier now.

Photographer: Susana Gonzalez/Bloomberg

One of the world’s highest soda taxes appears to be working. After just one year, purchases of sugary drinks in Mexico are down 12 percent, a new study shows. Even better, the biggest reductions have occurred among the poor, who can least afford health care.

Other governments -- including in the U.S. -- should be encouraged to impose similar taxes and take other strong actions to curb soda drinking.

Sugary drinks are among the primary drivers of obesity, and Mexico’s obesity rate is the second-highest in the developed world, trailing only the U.S. But increasingly, obesity is becoming a global epidemic -- and it’s catching governments flat-footed.

Some have encouraged children to exercise and eat healthy foods -- which is worthwhile advice. Others have conducted weight-loss competitions. Yet the epidemic worsens. Without bolder actions, the spread of diabetes and other weight-related diseases will continue. If current trends keep up, in 15 years, half of American adults will be obese.

The results of the Mexico study (which was funded in part by Bloomberg Philanthropies) are encouraging but not surprising. Raising the price of alcohol and tobacco through so-called “sin taxes,” which nearly all governments do, has proven to be an effective way to discourage their use. More study of Mexico’s tax is still needed -- correlation is not causation -- particularly about what impact, if any, the decline in soda sales has had on obesity. But the initial evidence should lead other governments to seriously consider adopting similar taxes. Berkeley, California,  became the first U.S. municipality to adopt a tax on sugary drinks in 2014. (Michael Bloomberg, majority owner of Bloomberg LP, supported the referendum.) Other cities and states should follow.

And they should take up other strategies, as well. They could start by eliminating sugary drinks from the federal food stamps program. Every dollar a family spends on cola is a dollar that can’t be spent on carrots -- or even cookies. Cookies at least have some nutritional value and help fill the stomach. Sugary drinks are the very definition of empty calories, providing no sustenance and doing nothing to alleviate hunger. A taxpayer-financed nutrition program shouldn’t leave people both hungry and sick.

Unfortunately, the Obama administration has thus far refused to allow cities and states to adopt this restriction. If they want to be serious about reducing obesity, both the president and Congress will need to be more open to such ideas. New federal dietary guidelines suggest Americans should consume less sugar, but the agency that wrote them has ignored advice from its own panel of doctors, which encouraged action on a drinks tax like Mexico’s. It’s true that people need to eat more peas and broccoli and consume far less sugar, but they’ll have more success in doing that if sugary drinks are taxed rather than subsidized.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.