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The Truth About Beverage Taxes

When a soda tax is passed, local economies suffer.

Some portray beverage taxes as an untapped source of money to improve public health or fill budget gaps. The documentary The Truth About Beverage Taxes shows the true cost of a tax on consumers and small businesspeople, and how the tax does not work as proponents say it will.

The Truth About Beverage Taxes begins in Berkeley, Calif., where city leaders backed Measure D, a penny per-ounce tax on the distribution of beverages containing sugar that went into effect June 2015.

The documentary illustrates how Berkeley is struggling to implement the beverage tax and goes on to show what has happened in Mexico, where a similar tax has been in effect since 2014. Mexican health professionals, businesspeople and ordinary citizens describe their experience with this tax. From what they are experiencing, the outlook for Berkeley is not good. In Mexico, beverage taxes:

  • Hurt the poor
  • Do not stop people from buying soda
  • Harm small businesses






The tax is 1 peso per liter on sugar-sweetened beverages, raising the retail price of soft drink products between 9 and 19%*. It might not seem like much, but it adds up quickly, especially when you’re on a tight budget.

*Kantar World Panel Mexico Report (December 2014)

 


 







The biggest effect of the beverage tax was felt by small businesspeople, but this tax impacts consumers as much as it does retailers. Thousands of small stores closed due in part to the tax. More than 600,000 families depend on these mom & pop stores for affordable groceries.* These stores were a source of income for thousands of Mexicans.

*INEGI (National Institute for Statistics, Geography and Information Technology)






The Mexican government said the tax will fund health initiatives and provide more accessible water fountains. It has failed to follow through on its promise. So where does the money go? It went toward federal spending in general.








 


Watch The Truth About Beverage Taxes to see how a beverage tax would affect your local economy and community.



References

  1. Kantar World Panel Mexico Report (December 2014)
  2. INEGI (National Institute for Statistics, Geography and Information Technology)