Understanding the Obesity Crisis in Mexico
Mexico allocates 1.78% of its GDP to obesity and overweight-related costs, while the revenue from healthy taxes barely reaches 0.19%. Experts propose raising these taxes to reach 0.6% of the GDP and transform consumption habits.
The Goal of Healthy Taxes
Healthy taxes aim to not only generate revenue but also make harmful products, such as sodas, sugary drinks, and ultra-processed foods, more expensive to alter consumption patterns and reduce their health impact.
The Current State of Unhealthy Food Consumption
According to Alejandra Macías Sánchez, director of the Center for Economic Research and Budget Studies (CIEP), these taxes have two main objectives: generate income and discourage the consumption of products that create negative externalities like obesity, diabetes, or hypertension.
- 4 out of 10 people suffer from overweight or obesity.
- Children consume more than 10% of their daily recommended caloric intake from added sugars, according to the WHO.
The health official warns that this pattern reduces life expectancy by up to 10 years and increases the risk of liver diseases, non-alcoholic cirrhosis, and chronic kidney damage. Even “light” or “zero” beverages alter gut microbiota and increase the risk of heart attacks or strokes by 23% to 31%, Macías explains.
Unhealthy Foods Under the Spotlight
The report “Healthy Taxes. More Resources for Public Health” highlights that over 80% of the Mexican population regularly consumes sodas, and 93.6% of schoolchildren drink them daily. Additionally, snacks, sweets, desserts, and sugary cereals are part of almost half of adolescents’ daily diets.
These types of foods, as Macías points out, often contain “a mountain of ingredients we don’t even understand,” contributing to the growing obesity prevalence among children and adults, placing Mexico among the world leaders.
The issue is significant: obesity and overweight cost around 445,791 million pesos in 2019, or 1.78% of the GDP—nine times the IEPS revenue for that year.
The Proposal: Higher and Specific Health Taxes
Currently, the IEPS on flavored beverages is charged per liter. However, experts suggest updating it based on sugar content and increasing the hikes beyond inflation to genuinely discourage consumption.
“The goal,” Macías explains, “is for these increases to make these products virtually unaffordable. If the adjustment is only for inflation, purchasing power remains unchanged, and there’s no change in consumption.”
With these reforms, the CIEP and allied organizations estimate that revenue could reach up to 0.6% of the GDP, equivalent to approximately 250,000 – 300,000 million pesos annually.
Reformulation vs. Industry
The food industry has attempted to address the issue by reformulating products, reducing sugar or incorporating sweeteners. However, Macías cautions that this strategy doesn’t always result in real improvements:
“They claimed removing sugar for colorants was a solution, but sometimes it’s worse. The logic is that taxes shouldn’t be removed even if products are reformulated because what we need is to change Mexico’s food culture.”
The fight against junk food and sugary drinks in Mexico extends beyond school bans or warning labels. The real change lies in pricing.
Experts emphasize that the correct approach is to elevate the cost of these products until they are no longer a daily option, which emerges as the clearest strategy to tackle a health crisis that claims more lives and public resources each year.
Key Questions and Answers
- What are healthy taxes, and what do they aim to achieve? Healthy taxes are levies on products like sodas, sugary drinks, and ultra-processed foods. Their primary goals are to generate revenue and discourage consumption of harmful products to reduce health impacts.
- Why are healthy taxes necessary in Mexico? Obesity and overweight-related costs account for 1.78% of Mexico’s GDP, while healthy tax revenue is only 0.19%. Raising these taxes could transform consumption habits and generate more funds for public health.
- What percentage of the Mexican population consumes unhealthy foods regularly? Over 80% of the Mexican population consumes sodas and other unhealthy foods regularly, with 93.6% of schoolchildren drinking sodas daily.
- How do healthy taxes aim to change consumption patterns? By making unhealthy products more expensive, healthy taxes intend to discourage their consumption and promote healthier choices.
- What is the estimated annual revenue from healthy taxes if raised to 0.6% of the GDP? If healthy taxes reach 0.6% of Mexico’s GDP, the estimated annual revenue would be around 250,000 – 300,000 million pesos.
