However, EU experts are debating the merits of the new findings and what their implications could be for European countries – like the UK -- considering ‘sin taxes’.
The study
The study looks at Mexican household purchases in the year after January 2014, when an 8% tax on non-essential foods over 275 kcal per 100g was introduced.
Foods affected include cakes, pastries, frozen desserts, salty snacks and chips. A one peso (€ 0.04) per litre tax on sugar-sweetened drinks is also levied.
“We found that the mean volume of purchases of taxed foods in 2014 declined by 25g per capita per month, or a 5.1% change beyond what would have been expected based on pre-tax (2012–2013) trends,” the team wrote in PLoS Medicine.
There were no changes in the purchase of untaxed foods, they added.
Low income households contributed most to the dip in high calorie food purchases, falling 10.2%.
Houses with medium socioeconomic status (SES) curbed their calorific food spending by 5.8%, whereas the tax had no effect on the most affluent members of Mexican society.
“These findings show that in the post-tax period, purchases of taxed foods declined more than we would expect if pre-tax trends had simply continued, particularly among low and medium SES households,” the team said.
It is one of the few reviews of health-related food and beverage taxes’ effects on food purchasing trends and whether low SES shoppers are more responsive to such measures, they added.
Implications debate
The study has stirred up ongoing debates over the benefits of unhealthy foods taxes for obesity management.
On the one hand, Malcolm Clark, co-ordinator, Children's Food Campaign -- Sustain, UK, told FoodNavigator the report shows that: “Fiscal measures – specifically a tax on certain types of products – do indeed demonstrably change consumer purchasing habits.”
It should be a driver for EU governments – such as the UK – to introduce sin taxes to reduce obesity, he added.
On the opposite side of the argument, Christopher Snowdon, director of lifestyle economics, at the Institute of Economic Affairs, UK, told us the study does not give sufficient basis for introducing a food tax elsewhere.
He said: “The public health lobby will bandy these kind of studies around and politicians who need to raise money will be happy to cite them, but the reality is that it’s a political and financial decision. It has nothing to do with health or obesity.”
Snowdon cited Mexico’s introduction of a pet food tax around the same time as its non-essential foods levy, adding: “Pets were not suffering from obesity. It’s about money.”
A relatively small tax on a small part of the food supply is not going to affect obesity in other countries in any way, he argued, adding: “It would hardly be surprising if a relatively poor country like Mexico saw a decline in sales from higher prices.”
Referring to the Mexican review, Snowdon added: “A 5% decline in sales indicates that most people kept shopping in much the same way most of the time. Unfortunately, they had to pay higher prices and so had less money for other things. That is not a good thing. It is a cost rather than a benefit.”
Clark countered that the figures reported are evidence the tax works in particular for lower income households, rather than simply introducing monetary inequality.
A marker of the scheme’s success is the fact there is no evidence of shoppers switching from taxed sources of sugar and calories to other unhealthy options which are not affected by levies, he said.
“This is especially important as diet-related ill health disproportionately affects poorer communities and they may lack resources and funds for proper medical care; so this is a measure that reduces inequality, not increases it as industry critics claim.”
In any case, researchers on the current study conceded that further studies are needed to evaluate the impact of the taxes on overall energy intake, dietary quality and other food purchasing patterns.
Food taxes introduced elsewhere in the EU include Denmark’s failed fat tax, and France’s levy on its sugary drinks, which is ongoing.
UK sugar tax
Plans for a UK sugar tax to be introduced in April 2018 were set out in George Osbourne’s budget earlier this year.
However, a fresh cabinet has since been installed in the wake of Brexit, leading to uncertainty over the sin tax proposed by previous leadership.
It is hoped studies like the new Mexican report will be proof enough to push the new government to plough ahead with the sugar tax plans, Clark said. It will be a test of endurance for the new cabinet to do so in the face of many powerful detractors, he added.
“Food and soft drinks companies, as well as the tobacco industry and the various think tanks and lobby groups that they all fund, seem desperate to stymie any policies and regulations that would prioritise public health and longer term savings to NHS and the economy over their own short-term profit-making ability,” he said.
A number of food and beverage giants could consider legal action if a UK sugar tax is passed, this publication reported previously. The UK industry body, the Food and Drink Federation (FDF), also called on the new government to halt the sugar tax.
Snowdon argued the idea of a sugar tax does not seem to be evidence based, and could be a negative impact on the economy.
“The problem for the British government is that the tax will cost so much by raising the price of index-linked payments that it won’t pay for itself for at least a few years. It may never pay for itself,” he said.
“Now that Osborne has gone, the government has an opportunity to look at the tax with a clear head. If it acts rationally, it will scrap the tax.”
Source: PLoS Medicine
Published online, doi: 10.1371/journal.pmed.1002057
“First-Year Evaluation of Mexico’s Tax on Nonessential Energy-Dense Foods: An Observational Study”
Authors: Carolina Batis, et al.