Regulation of Vice – Sugar Tax a la Mexico? Correlation to Diminished Consumption

Regulation of Vice – Sugar Tax a la Mexico? Correlation to Diminished Consumption

New Delhi, January 9, 2015:  Delhi has followed Mexico City’s footsteps in curbing vehicle circulation to reduce pollution. With India being the diabetes capital of the world and the increasing number of lives being lost to preventable lifestyle diseases, the need of the hour is for India to also consider following Mexico’s sugar taxation policy.

As reported in the British Medical Journal (BMJ) a Mexican peso-per liter tax on sugary drinks implemented in January 2014 reduced consumption, specifically a 6% decline in purchase of these beverages within a year, with increased price by 10%. This grew to a 12% decline in the final month of the year, mostly amongst lower income strata. Chile, Barbados, and France have also implemented sugar beverage taxes with the UK now considering it, and Mexico has further imposed taxes on other sugar-laden junk foods.

Like India, prevalence of diabetes is amongst the highest in the world in Mexico, with around 70% of adults being overweight or obese. Clearly regulation of vices such as cigarettes through increased costs have led to intended benefits world over of lower consumption as well.

A new report in The Lancet has estimated that reducing sugar content in sugar sweetened drinks by 40% over 5 years could prevent half a million people from becoming overweight and a million people from becoming obese.

Sharing their thoughts, Dr. S.S Agarwal – National President and Padma Shri Awardee Dr. KK Aggarwal – Honorary Secretary General IMA and President HCFI in a joint statement said, “With India being the diabetes capital of the world there is an immediate need to reduce the consumption of high trans-fat and sugar laden products. While like the West, the consumption of sweetened beverages has proliferated to the masses in our country; a compromised diet comprising of high trans fat food items including traditional sweets, ghee-friend delicacies – the consumption of which spikes during festival seasons further adds to the problem. The first and foremost step is to raise awareness about the increasing burden of lifestyle diseases in our country and the ways in which they can be prevented. In the long run it is important for the administration to consider following taxation laws similar to that in Mexico. Given the diversity of our country, it would be recommended to take Mexico’s policy on sweetened beverages as a benchmark and customize it to suit the Indian needs”.

In our country adulteration is also rampant and this must be considered. With supply chains not streamlined as abroad and fragmented agricultural distribution and production system, India should be careful of unintended consequences such as hoarding by traders.

While bold steps have been taken to cut pollution in the capital, alongside overall tax reform, the government must work on the overall regulation of vice, starting with curbing what is in its control to stem lifestyle disease such as diabetes, currently at epidemic proportions.