In a controversial decision, part of the Mexican government has approved a package that will add a country-wide tax on junk food.
According to the Los Angeles Times, new taxes on high-calorie foods and sugary drinks were approved by Mexico's lower house of Congress in a marathon 18-hour session, which ended Friday. The new plan is reportedly likely to become a law. They're part of a broader package of taxes and other fiscal changes proposed by President Enrique Peña Nieto aimed at generating nearly $20 billion for the national treasury.
Foods with high calorie counts and sugary soft drinks, with a limit at 275 calories per 100 gram, will both be taxed. Foods that fall into the category will be taxed at 5 percent of their usual price, while gum will be taxed at 16 percent. Sodas have an estimated tax of eight extra cents per liter.
Mexico is known to have one of the world's highest rates of obesity, recently surpassing the United States, which has 31.8 percent of adults are obese. According to the United Nations' Food and Agriculture Organization, 32.8 percent of Mexican adults are obese. Obesity-related diabetes is now the leading cause of death.
While health advocates applauded higher prices for junk food and see the tax as a win and the start of helping Mexico overcome its high obesity rate, others see the price hikes as a blow that will negatively affect small business owners and poor consumers.
"It will hurt," said Eusebia Blas Luna, 50, who has been selling candy bars and sodas chilled by blocks of ice out of a tiny stand on Mexico City street corners for 20 years. "Sales will fall, people will stop buying. It hurts them too. They say this stuff isn't good for you, but everyone gets a craving."
Most of the organized opposition to the junk food and soda taxes has come from a large coalition of business groups that argue the reduced sales will eventually lead to lost jobs, not to mention diminished profits.
"The little stores rely on soft drink sales to keep their doors open," spokesman for the Alliance for the Protection of Jobs, Cuauhtemoc Rivera said.
According to the Times, the fiscal package does little to address the vast "informal" economy and may in fact push more Mexicans into that precarious form of work.
At the Oxxo store, a clerk who identified herself only as Aracely because her bosses would get angry if they knew she had spoken to a reporter, said soft drinks and junk food were the biggest sellers, even though the refrigerated section offers a fruit bowl.
"It's like with cigarettes," she said. "You can raise and raise the price. People still buy them."
