Soda sales rise again in Mexico 2 years after 10% tax imposed

Mexico’s soda tax was an attempt to cap alarming obesity and diabetes rates. (Rebecca Blackwell/AP)
Mexico’s soda tax was an attempt to cap alarming obesity and diabetes rates. (Rebecca Blackwell/AP)

By Amy Guthrie and Mike Esterlin / Wall Street Journal

Sales of soda are climbing two years after Mexico imposed a roughly 10 percent tax on sugary drinks — a bright spot for an industry that has feared it could be cast as the next tobacco.

Mexico’s tax was an attempt to cap alarming obesity and diabetes rates in a country where per-capita soda consumption is the highest in the world. It came at a time when then Mayor Michael Bloomberg was trying to limit sales of the beverages in New York City, and more countries are weighing a similar tax.

Purchases, however, are rising in Mexico after an initial drop, making the country a key-growth market again for soda giants Coca-Cola Co. and PepsiCo Inc.

Underscoring the resiliency of sugary drinks, the tax of one peso per liter has raised more than $2 billion since January 2014, about a third more than the government expected.

“Coke is like cigarettes—it turns you into an addict,” said Luis de León, a 24-year-old Mexico City parking attendant, who stood next to a three-liter bottle he recently shared with two other valets.

http://www.wsj.com/articles/soda-sales-in-mexico-rise-despite-tax-1462267808

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