Will Mexico’s Soda Tax Spur California?

With a massive experiment underway next door and more research supporting the premise at home, California policymakers may try again to tax sugar-sweetened beverages in the effort to discourage sugar consumption, reduce obesity and raise money.

A new tax on soda and other high-calorie foods went into effect on New Years Day in Mexico, the newly crowned fattest country in the world. Beverage and food manufacturers, led by U.S. soft drink companies, fought the proposal but health advocates, worried by the increase in obesity and diabetes — now the country’s leading cause of death — pushed hard for the new tax.

“I think what’s happened in Mexico is going to be a game-changer in California and throughout the world,” said Harold Goldstein, executive director of the California Center for Public Health Advocacy and longtime proponent of taxing sugary drinks.

“What Mexico is doing is one step ahead of California and I hope we’ll be following right behind. We, too, have skyrocketing rates of obesity and alarming increases in diabetes. If we don’t do something about it, the evidence is absolutely clear both trends will just keep growing,” Goldstein said.

Some California politicians and health advocates agree.

Genoveva Islas, program director for the Central California Regional Obesity Prevention Program, called Mexico’s new law “an inspiration.”

“Field polls have indicated that the majority of voting Californians would vote for a soda tax if the monies were used for obesity prevention specifically,” Islas said. “Mexico is an inspiration. They are a country who has come to terms with their reality as the heaviest nation in the world and they are being innovative in their response to the challenge. The U.S. and California should follow suit,” Islas said.

Ash Kalra, San Jose City Council member who tried unsuccessfully to ban the sale of sugar-sweetened soda at all city facilities, said he hopes Mexico’s example will help turn the tide of public opinion in California.

“California is the holy grail in many policy issues,” Kalra said, comparing the campaign against sugary beverages to the campaign against tobacco and a more recent attempt to discourage the use of plastic bags.

“There’s going to be opposition in any California jurisdiction, but once something passes locally, it will make its way to Sacramento and if California passes something, the rest of the country will follow,” Kalra said.

Beverage Industry: Mexico Law ‘Not a Harbinger’

“We do not think that tax policy in Mexico is a harbinger of things to come in California,” said Chuck Finnie, a spokesperson for the beverage industry. “The recent political history around soda taxes suggests that California voters don’t like them and we don’t see that changing because of new regulations in Mexico,” said Finnie, who represents Californians for Food & Beverage Choice, a coalition spearheaded by the American Beverage Association. Finnie works for BMWL, a San Francisco consultancy specializing in public opinion campaigns.

Finnie said Mexico’s sugar and fat taxes are part of a broad plan to raise revenue, not a specific attempt to deal with obesity or diabetes.

“This is a small part of a much bigger package of new taxes but those in the permanent professional advocacy class for beverage taxes take it upon themselves to seize upon that one tax to suggest it has legs in California,” Finnie said. “I don’t see that happening.”

Top Obesity ‘Honors’ for Mexico

Mexico overtook the United States last year as the world’s fattest country, according to the United Nations. Almost one third of the country’s residents (32.8%) were considered obese in statistics released by the U.N. last summer. The U.S. is close behind with an obesity rate of 31.8%.

Mexican officials — with the help of a $10 million grant from former New York City Mayor Michael Bloomberg — pushed through new taxes that increase the price of soda and high-calorie junk food by 8% to 10%. Sugar-sweetened drinks are taxed one peso per liter.

Taxation proponents hope Mexico’s new law will produce evidence that raising the price of high-calorie food and drink will reduce levels of obesity and diabetes.

While Mexico’s new taxes are primarily a vehicle to generate new revenue, they also represent the largest cultural/social experiment to curb the consumption of sugar and reduce obesity and diabetes. 

Beverage Industry Prevailing in California

So far, the beverage industry has been successful in squashing every attempt to tax sugary drinks in California — from statewide legislation to local ordinances.

A bill by state Sen. Bill Monning (D-Carmel) that would add a penny to every ounce of sugar-sweetened beverage sold in California was approved by two committees in the state Legislature last year but stalled in the Senate Appropriations Committee. If SB 622 doesn’t make it out of Appropriations by the end of January, it effectively dies. A spokesperson in Monning’s office said there are no plans yet for another bill.

Ballot measures seeking soda taxes in two California cities last year — Richmond in the Bay Area and El Monte in Southern California — both failed.

Soda tax proponents say they have science on their side, citing numerous studies linking obesity and diabetes with the consumption of sugary drinks.

“I hope California legislators take a close look at new research from UCSF,” Goldstein said.

new study by UCSF researchers suggests a penny-per-ounce tax on sugar-sweetened beverages could save California more than $1 billion over a decade by reducing rates of diabetes and coronary heart disease.

“The evidence is overwhelming,” Goldstein said. “Sugary drinks are the largest contributor to our obesity crisis and the alarming rise in diabetes. Over the past 10 years, the percentage of teens with diabetes or pre-diabetes in our country went from 9% to 23%. It’s not going to change unless we do something,” Goldstein said.

Policymakers and elected officials in a couple California cities (San Francisco and Berkeley), as well as several states including Hawaii, Vermont, Illinois and Washington are looking into new regulations governing sugar-sweetened beverages, Goldstein said.

“These are still early days in this movement,” Goldstein said. “It took 20 years to get the first tax on tobacco. Were only in year three.”

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