Coca Cola lashes out against Mexican Tax Reform

Cost of soft drinks will increase up to a 20%

"A Tax on soft drinks isn't justified. People get calories from many different foods and fountain drinks, and a tax on a product will not resolve an issue as complex as obesity", Coca Cola argued in a press conference.

The issue the company has with the tax reforms is one of the key points, where the President of Mexico Enrique Peña Nieto proposed to increase the tax on sugary beverages, with the justification of fighting obesity.

Make soft drinks more expensive so people won't buy them? Coca Cola made emphasis that this measure will affect consumers who have low and mid range incomes.

The company added that soft drinks as well as the rest of sugary beverages are the equivalent of 7% of the average calories in a Mexican's diet, who have proven to be, the largest consumers of soft drinks in the world.

The Mexican Association of Soft Drinks and Carbonated Refreshment Producers, has joined Coca Cola and their position on this, agreeing that this measure will not make much of a difference when it comes to fighting obesity, "Even in the best case scenario, this will only reduce the calorie consumption by 1%, which in itself will not really amount to much when trying to resolve the problem of obesity in Mexico, it does however damage the economy of families with lower incomes, which 52 million Mexicans are a part of", the president of the association, Emilio Herrera Arce, stated.

It is estimated that if the tax reform is approved, the price of soft drinks and sugary beverages will increase in 20%, which could reduce consumption by 16% to 24%. Studies point that mexican families spend more on soft drinks than they do on basic foods like eggs, tortillas and beans.

The National Chamber of Sugar Industries and distilleries, The Mexican Soft drink Industry, and the National Union of Sugar Cane producers, have also manifested their discontent, given that this measure will not only damage the consumer, but everyone involved in the product manufacturing, such as sugar cane producers, farmers, sugar providers, drinks, workers and salespeople.

Several non-government organizations have applauded this aspect of the tax reform. Recent studies showed that an average mexican consumes more than 163 liters of soda a year, that number is higher than americans by as much as 40%. Investigations also pointed out that the consumption of beverages in Mexico is the main source of calories, nearly 25% comes from beverages.

Due to the results of these investigations, the Health Department pointed out that the consumption of high amounts of energy through soft drinks is one of the major causes of the epidemic that is obesity in Mexico, and have made several calls to increase taxes on soft drinks and sugary beverages so that this extra income can be used to set up access to free drinking water in schools and public places.

You can consult the study on soft drink consumption in Mexico here.


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