Mexico sees sugary drinks sales rise following sugar tax introduction

The news comes after Michael Noonan announces similar tax in Budget 2017

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Image: Anthony Devlin / PA Wire/Press Association Images

Mexico has seen a significant rise in the consumption of fizzy drinks - two years after introducing a 'sugar tax'

In 2014, the Mexican government passed taxes on any non-alcoholic drink with added sugar and on calorie-dense snacks, such as chocolate, pudding, ice cream, and candy. By the end of the year, Mexicans were buying 17% fewer of the taxed drinks than they did before the tax passed, one study found.

The tax of one peso per liter has raised more than US $2bn since January 2014, about a third more than the government expected.

However, purchases are rising again in the country after this initial drop - but campaigners are calling on the government to double the tax.

The news comes after a new report from the World Health Organisation is encouraging all countries to implement a tax on sugary drinks in order to curb soaring obesity rates.

Finance Minister Michael Noonan announced the introduction of the tax in 2018 as part of this year's budget.

A report from the WHO says that a tax of 20% or more results in a drop in sales and consumption of sugary drinks. People consume fewer "free sugars" such as fructose and glucose, take in fewer calories and reduce their risk of tooth decay.

"Consumption of free sugars, including products like sugary drinks, is a major factor in the global increase of people suffering from obesity and diabetes," said Dr Douglas Bettcher, director of the WHO’s department for the prevention of non-communicable diseases.

"If governments tax products like sugary drinks, they can reduce suffering and save lives. They can also cut healthcare costs and increase revenues to invest in health services."

In 2014, the Mexican government passed taxes on any non-alcoholic drink with added sugar and on calorie-dense snacks, such as chocolate, pudding, ice cream, and candy. By the end of the year, Mexicans were buying 17% fewer of the taxed drinks than they did before the tax passed, one study found.

The tax of one peso per liter has raised more than US $2bn since January 2014, about a third more than the government expected.

However, purchases are rising again in the country after this initial drop - but campaigners are calling on the government to double the tax.

Noonan said that the tax would be introduced in line with similar UK plans in April 2018.

Before that, there will be public consultation over the measure which will run until January next year.

“It is of utmost importance to me that such a tax is as effective as possible, as fair as possible, and minimises the administrative burden on business,” he said.

Health authorities and officials have been making calls for a tax on all sugar-sweetened drinks (SSDs) for years, with the Royal College of Physicians warning in 2015 that Ireland could become the fattest country in Europe by 2030 if urgent action isn’t taken.

The Irish Beverage Council criticised the measure following the announcement this week.

Kevin McPartlan, director of the Irish Beverage Council, said the group was "extremely disappointed" with the measure: “We are extremely disappointed that the Minister for Finance continues to labour under the delusion that additional taxes on soft drinks will have any positive impact on obesity,” he said.