Coca-Cola Slams Mexico's Plans to Impose a Tax on Sugary Drinks

Other soda makers and Coca-Cola criticized Mexico's plans to impose a tax on sugary drinks while consumer watchdogs warned it was urgently needed to combat soaring obesity and diabetes. President Enrique Pena Nieto wants Mexicans to pay an extra peso (almost 8 US cents) for every liter of sweetened drink in a country that guzzles more soft drinks than any other and competes with the United States for the dubious title of world's fattest nation.

Pena Nieto says the tax would contribute to help Mexicans reduce their consumption and fight obesity, which is also affecting many children. If Congress approves the tax, Mexico would join France in introducing a special levy on sodas.

But Coca-Cola de Mexico argued in a statement that "a tax on beverages is ineffective to combat a problem as complex as obesity."

"To change behaviors effectively, we need to ensure people understand that all calories count, regardless of the source -- and that includes our caloric beverages too," the company said.

Coca-Cola said studies show that soft drinks account for between 5.5 percent and 6.6 percent of calories in the average Mexican diet, "so it is difficult to understand why beverages are viewed by some as the primary cause of weight gain."

Pena Nieto's plan, part of a wider fiscal reform he announced Sunday to improve tax collection, cites statistics showing that Mexico leads the world in soda consumption with 163 liters (43 gallons) per capita per year compared to 118 liters in the United States.

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But the National Association of Soda and Carbonated Water Makers argued that the special tax would "not resolve the obesity problem" and would harm sugar cane producers as well as the poorest consumers in a country where 45 percent of its 118 million people live in poverty.

The tax would, at best, reduce the calorie intake of Mexicans by just 1.1 percent on average, said the association, which represents bottlers of Coca-Cola, Pepsi and other brands.

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Emilio Herrera, the association's president, told AFP the industry would present its arguments to the government and lawmakers.

"We are confident that our reasons back the fact that (the tax) is not feasible," he said.

The 2012 national health survey shows that just under a third of Mexicans are obese compared to 35.7 percent in the United States, according to the latest official US figures.

Mexico has the highest prevalence of diabetes among the 34 nations of the Organization for Economic Co-Operation and Development (OECD) with 10.8 percent of the population suffering from the disease.

Alejandro Calvillo, of the Consumer Power watchdog group, told AFP the tax was "urgent, because there is a public health emergency."

He said the tax alone was not enough and the government should increase access to drinking water in schools and public spaces.

"We must develop a culture of water, because people are hydrating with sodas, especially in the poorest communities," he said.

Yuritzin Flores, of the international charity group Oxfam, said the tax must be accompanied by public health programs, otherwise it would become "a ghost initiative, because the money would collect in a fund" and "we don't know where (the money) would go at the end of the day."

Source-AFP