Mexico’s sugary drinks tax – behind the scenes Dr Juan A. Rivera Instituto Nacional de Salud Publica Mexico

Content Synopsis of process that led to the tax approval Generation and use of scientific evidence by the National Public Health Institute to justify and design the tax Evaluation of the effects of the tax on price, sales volume and other outcomes, and use of the evaluation results to maintain the tax Lessons learnt that can be applied by cancer societies in their advocacy and lobbying work

Synopsis of process that led to the approval of the tax Public debate about Obesity, food environment and high intake of SSB´s Incoming Administration and Congress SCIENCE Lobbying Organizations Advocacy Organizations El Poder del Consumidor Polithink Food and Beverage Industry: a Strong force against the tax Need of Government Revenue INSP Science (Research Institution) Legislative and Executive Branches of Government PROCESS IN SENATE 2013 A Champion proposed $2 pesos/L tax Executive proposed a $1 peso/L tax Senate approved the $1 peso proposal Resolution on use of tax revenues Industry attempted to reverse the tax in 2015 but failed Proposal to increate tax to $2/L in 2016 also failed SSB´s tax approved

Evidence about Nutrition transition in Mexico

Prevalence of overweight and obesity Prevalence of overweight and obesity * in children 5-11 y, adolescent girls and women (1988 to 2012) % 69.3 70.8 61.0 32.3 32.0 33.4 35.8 34.5 28.3 25.5 11.1 Children 5-11 y Adolescent girls (12-19 y) Women (20-49 y)

The need of a comprehensive multicomponent strategy for obesity prevention   POLICY AREA SPECIFIC POLICY ACTIONS IN MEXICO N Nutrition label standards and regulations on the use of claims and implied claims on foods GUIDELINE DAILY AMOUNTS (GDA´S) SYSTEM O Offer healthy foods and set standards in public institutions and other specific settings FOOD AND BEVERAGE REGULATIONS IN SCHOOLS U Use economic tools to address food affordability and purchase incentives TAXES ON SSB´S AND JUNK FOOD  R Restrict food advertising and other forms of commercial promotion REGULATION OF MARKETING TO CHILDREN IN TV AND MOVIE THEATERS DURING SELECTED SCHEDULES & PROGRAMS I Improve the nutritional quality of the whole food supply NO NATIONAL POLICY S Set incentives and rules to create a healthy retail and food service environment ISOLATED EFFORTS (NUTRITION EDUCATION IN GOVERNMENT OWNED RURAL RETAIL STORES) H Harness the food supply chain and actions across sectors to ensure coherence with health NO NATIONAL POLICY  Inform people about food and nutrition through public awareness CAMPAIGN PROMOTING GENERAL BEHAVIORS: MINDFUL EATING, MOVING AND ATTENDING PRIMARY HEALTH CLINICS Nutrition advice and counselling in health care settings DIETARY GUIDELINES RELEASED LAST YEAR IN THE PROCESS OF IMPLEMENTATION IN PHC  G Give nutrition education and skills

HIGH INTAKE OF SUGAR SWEETENED BEVERAGES

High Intake of added sugars and sugar-sweetened beverages in Mexico WHO recommends reducing the intake of free sugars to less than 10% of total energy intake Added sugars contribute 12.5% total energy intake in Mexican diet (60 gr/person/day) Sugar-sweetened beverages (SSBs) contribute 70.3% of added sugars % of Mexicans consuming >10% of total energy from added sugars Age Males Females 1-4 y 60.2% 5-11 y 57.8% 65.9% 12-19 y 70.8% 84.6% ≥ 20 y 63.8% 64.1% Non-dairy SSBs consumed by: 12% of infants <6 mo 36% of infants 6-11 mo 65% of child 12-23 mo Sánchez-Pimienta TG. J Nutr 2016;146(Suppl):1888S–96S. López Olmedo N, y Col. J Nutr 2016;146(Suppl):1856S–65S. Rodríguez-Ramírez S. y Col. J Nutr 2016;146(Suppl):1916S–23S

Evidence about health effects of SSB and added sugars Meta-analysis by Te Montenga, Mallard S, Mann J (BMJ, 2013)

Health Effects of SSB´s and Added Sugars

National Recommendations of the use of taxes to fight obesity in Mexico Beverage recommendations for Mexico (2008) 2007 Evaluate the use of policy instruments such as…taxes … to reduce the consumption of less healthful foods and beverages 2008 One of the policy recommendations was to consider taxing soda Initiated a public debate about the effects of SSB on health which eventually led to banning SSB in schools and the SSB tax 2012 - Consider Taxing unhealthy processed food (SSB and Junk Food) - Need own and cross price elasticities estimates - Use of tax revenue for obesity prevention

International Recommendations WHO recommends reducing the intake of free sugars to less than 10% of total energy intake and a further reduction of the intake of free sugars to below 5% of total energy intake Public policies can influence prices through taxation, subsidies or direct pricing in ways that encourage healthy eating and lifelong physical activity Use economic tools to address food affordability and purchase incentives

Price elasticity demand for soft drinks Data Sources By raising a 10% price of the soft drinks, the consumption reduced by: National Income and Expenditure Surveys (2006, 2008, 2010) SSB -11.6%* Mexican Family Life Survey (2002, 2005) Soft drink 600ml -12.9%* * p<0.01 Elastic Demand Elasticity larger for the poorest population Cross-price elasticity results indicate healthy substitutes (water) Colchero MA, Salgado JC, Unar M. , Hernández M., Rivera JA. Price elasticity of the demand for soft drinks in Mexico. Economics and Human Biology ttp://dx.doi.org/10.1016/j.ehb.2015.08.007

Mathematical modeling Mathematical modeling* for projections of effect of soda tax on body weight and diabetes prevented cases Prev. cases 2030 (X 1000) 2050 10% Tax 400 - 630 977 – 1,420 20% Tax 800 – 1,275 1,960 – 2,870 30% Tax 1,200 – 1,920 2,955 – 4,350 71.3 70.9 70.5 70.1 *Hall KD model (with microsimulation to allow projections for each individual) Barrientos Gutiérrez T, Meza Rodríguez R, Rodriguez ER, Zepeda Tello R

Evaluation of the tax: changes in purchases after the implementation of the tax A 6 percent average decline in purchases of taxed beverages over 2014 compared to pre-tax trends. Difference accelerated over 2014 and reached 12% by December 2014. A 4 percent increase in purchases of untaxed beverages over 2014 Colchero MA, Popkin BM, Rivera JA, Ng SW.. BMJ 2016;352:h6704

All socioeconomic groups reduced purchases of taxed beverages. Evaluation of the tax: changes in purchases after the implementation of the tax LOW SOCIOECONOMICSTATUS All socioeconomic groups reduced purchases of taxed beverages. Reductions higher among lower socio-economic households, averaging 9% decline over 2014 compared to pre-tax trends MIDDLE SOCIOECONOMICSTATUS HIGH SOCIOECONOMICSTATUS

Essential data for advocacy and action High and growing prevalences of overweight and obesity and co-morbidities SSB´s intake is a risk factor for obesity and chronic diseases Dietary intake of SSB´s in all ages well above WHO upper limit Own and Cross Price Elasticity of Demand for SSB´s Fiscal Revenues for different tax designs Modeling effects of a SSB Tax on obesity and health outcomes Potential use of revenues for obesity prevention Taxing SSB´s part of a comprehensive obesity prevention strategy Evaluation of effects on prices and purchases

Conclusions Factors which were instrumental for success of the tax: Monitoring and research by INSP was key in justifying the need for a SSB tax as part of a comprehensive strategy for obesity prevention in Mexico The Nutrition Transition information and its dissemination set the stage for the need of policy actions for obesity prevention Information about the high intake of SSB´s and their harm to health justified actions targeted to discourage their intake The elasticity studies as well as modeling their potential health impact justified SSB´s taxes

Conclusions Factors which were instrumental for success of the tax: Local as well as international recommendations about the need to limit added sugar and SSB´s intake and to use fiscal policies Evaluation of the changes in prices and purchases after the tax documented that the tax is working and was key for defending the tax against industry´s attempts to reverse Generation of evidence by INSP and strategic partnership were vital for tax approval and defense

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