Sometimes I miss newsworthy events. Such is the case with the Cheetos tax that Mexico started charging in 2014. (I also missed the memo on brand new socks being labeled “R” and “L” – what is up with that??? But I digress. . .) Now, enough time has passed to see whether high energy density, non-essential aka junk food consumption went down in Mexico. And it did, but not for everyone. Excellent study available here.
I call it the Cheetos tax, but the eight percent tax applies to all foods with more than 275 kcal per 100 grams and a peso per liter of sugar-sweetened drinks is levied.
Overall, consumption of the taxed foods went down 25 grams per capita per month. Put into terms of sugar, the reduction is roughly one-half of a 12-ounce soda. That may not seem like much but think of it month after month, person after person and you might have a dent into obesity and other junk-food-related problems.
Per capita is the average of everyone, which blurs what is happening to different kinds of people. Since lower income households have less to spend on food, one would expect that this tax might hit them harder and therefore they would cut back on the taxed foods more. That’s exactly what happened. Low social economic status households reduced their junk food intake by more than 10 percent, while mid-range households cut back only 5.8%. High income households made no (statistically discernible) change in their purchases of taxed/ junk foods.
One might think that the poor will get more of the health benefit of this tax, and the rich will get less. One would be dead wrong on this. In another example of being-rich-doesn’t-suck, the rich suffer less ill consequence from their diet. In fact, if we were able to get rich and poor to eat the very same amount of junk food, the poor would still have more obesity and diabetes than the rich. The exact pathways of this phenomenon are still just theories, but one plausible theory is that the poor have more stress hormones circulating in their bodies (perhaps from having less control over their day-to-day activity). The higher level of stress makes the body more prone to illness.
Kudos to Mexico for having the courage to put junk food a bit further out of reach, and the people foregoing it are the ones who can benefit most. The flip side is that the tax is regressive, “punishing” the poor. It’s easy for me to say the tradeoffs of short-term-joy against long-term-health are worth it, but then again I’m not giving up anything in this deal. Nevertheless, I hope Mexicans do reap the rewards of better health. I will look forward to that study showing lower obesity, diabetes, and hypertension. Other countries might take notice and follow their lead.