Mexico Taxes Soda to Combat Obesity

popA food earthquake just hit south of the border. Mexico has successfully passed legislation placing an 8 percent sales tax on sugary soft drinks in response to their obesity epidemic. This is a significant public policy threat to the revenues of industrial beverage companies like Pepsi and Coca-Cola. It also raises public policy questions for the U.S. as it struggles with its own national epidemic of obesity and diabetes.

Health care costs expand with waistlines

Mexico and the United States are two of the world’s fattest countries. In the U.S. 31.8 percent of adults are classified as obese. In Mexico, it is 32.8 percent.

Heightened obesity levels increase human suffering. Obesity is linked to type 2 diabetes, coronary heart disease, stroke, hypertension and arthritis. Today, 25 million Americans have type 2 diabetes. 27 million have chronic heart disease. 68 million have hypertension and 50 million have arthritis.

Heightened obesity levels also place a heavy cost burden upon our national economy and family budgets. In the U.S., the cost of treating obesity-related diseases is $48 billion. The Harvard School of Public Health estimates that the added costs of lost work days, increased medical insurance rates and lost wages results in a $190 billion cost impact upon our national economy.

Increased sodas sales drive obesity rates higher

The consumption of just one can of soda is not going to make a person obese or cause diabetes. It is the volume of soda being consumed by Americans and Mexicans that is threatening human health. According to the national Soft Drink Association, the average adult in the U.S. consumes 600 12-ounce servings of soda per year. Mexico is the world’s largest consumer of soft drinks. The average Mexican drinks a stunning 46 gallons of soda per year! Coca-Cola’s own estimates are that the average Mexican consumes 650 cans of soda per year.

Research points to increased soda consumption driving obesity rates higher in both Mexico and the United States. The rate of increased soda consumption and the increase in obesity rates have risen together.

Soda plus junk food are threatening our children’s health

Soda and fast food companies view their products as benign to human health because a “calorie is a calorie.” Research say this is not the case. A National Health and Nutrition Examination Survey found that top sources of energy for 2 to 18-year-olds were grain desserts, pizza and sugar sweetened beverages. This study went on to identify that half of the “empty calories” in our children’s diet comes from just six foods: soda, fruit drinks, dairy desserts, grain desserts, pizza and whole milk. Illogically, government policy continues to support the food industry’s promotion of increased junk food and soda consumption by our sons and daughters that over the long term will increase their exposure to obesity-related diseases.

Marketing, advertising and volume price incentives drive obesity rates higher

I attended a national marketing conference where the Coca-Cola company’s confused ethics were brought to my attention. At this conference, a Coca-Cola marketing manager presented his success in growing Diet Coke sales through a promotional campaign focused upon the erosion of polar bear habitat due to climate change. This Diet Coke marketing campaign was a Hollywood-quality media outreach that successfully engaged youth and the millennial generation on their heightened focus of environmental issues. Proudly, this marketing manager reported that this campaign drove the sale of Diet Coke to record results. This case study left me with these impressions:

  • Polar bears gained needed publicity on their loss of habitat
  • Nothing really happened that enhanced the survival rate of polar bears
  • The Coca-Cola company grew their revenues
  • A marketing team may have gotten a financial raise
  • The health risk to U.S. citizens, especially our children, from drinking “empty calories” was increased

Will Mexico’s sales tax on soda reduce obesity?

The public policy question of Mexico’s 8 percent tax on soda is whether it will result in reduced sugar consumption, resulting in the reduction of obesity. Raising the price of a product through a tax will reduce its purchase if these three key conditions are met:

  1. Consumer incomes do not increase to levels that economically compensate for the demand suppressing tax
  2. There are viable and cost-attractive product substitutes to the product being taxed
  3. The product tax is significantly high enough to create a new “cultural norm” away from purchasing the taxed product

The challenge for Mexico is that soda fills a consumer void in clean water supplies. Soda has also become a cultural norm promoted by millions of dollars in annual advertising that links soda to the aspirations and values of consumers. And the income of Mexicans are increasing and this income increase can blunt or eliminate the demand-suppressing impacts of a tax upon soda.

Public policy that can reduce obesity

The current U.S. public policy of increasing consumer awareness of the health risks tied to high levels of soda consumption is at best slowing the rate of soda consumption. Encouragingly, at least half of U.S. moms say they are reducing their family’s consumption of soda.

Cigarette regulations provide an example of public policy that will meaningfully reduce soda consumption levels and its human health impacts. The public policy tools used to reduce the rate of cigarette consumption were:

  • Significantly higher product taxes
  • Advertising restrictions, especially toward children
  • Very visible and frank package labeling that links consumption to adverse health risks
  • Regulation of adult consumption behaviors
  • Sales prohibition to minors

Applying similar rules and regulations to soda sales will reshape the current cultural norm of soda drink dispensers that offer unlimited refills and “super size me” portions. Without this level of public policy, it is highly unlikely that the U.S. will achieve affordable health care insurance or significant reductions in the human suffering created from the marketing of obesity-linked diets.

Bill Roth is an economist and the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues. Follow him on Twitter: @earth2017

[image credit: Vox Efx: Flickr cc]


▼▼▼      0 Comments     ▼▼▼

Eating themselves to death

MEXICO has long been a country that derives extraordinary pleasure from eating and drinking—and it hasn’t minded the consequences much either. Gordo or gorda, meaning “chubby”, is used by both wives and husbands as a term of endearment. Pudgy kids bear proudly the nickname gordito, as they tuck into snacks after school slathered with beans, cheese, cream and salsa.

Your correspondent, having just arrived to live in Mexico City after more than a decade away, finds the increase in waistlines even more staggering than the increase in traffic. Mexico has become one of the most overweight countries on earth, even more so than the United States; a quarter of its men and a third of its women are obese. Indecorously, the country has even come up with figures on figures: the Mexican Diabetes Federation says that among women between 20 and 49, the average waistline is 91.1cm (35.9 inches), more than 10cm above the “ideal” size. Stores are now full of large- and extra large-sized clothing.

Time was, a prominent girth may have been enviable proof of relative prosperity. Now, it is a serious health risk. At a conference here on April 9th it was estimated that more than 10m Mexicans, or almost a sixth of the adult population, suffer from diabetes, largely because of over-eating and increasingly sedentary lifestyles. Mexico has the sixth most cases of diabetes in the world.

Diabetes is one of the top two causes of death in the country, alongside (and occasionally overlapping with) heart disease. The diabetes federation says that the illness kills 70,000 people a year. However, it gets far less attention than much less deadly diseases such as HIV/AIDS, not to mention organised crime (which is responsible for roughly 60,000 deaths in the past six years). “It could get to the point where we are literally eating ourselves to death,” says Jesper Holland of Novo Nordisk, a Danish health-care company that is a big supplier of insulin to Mexico.

The precise causes of the onslaught are hard to pin down. The prevalence of snacking on salty, fatty food and drinking sugar-heavy fizzy drinks appears to be a big part of the problem. Reforma, a national newspaper, reported on April 9th that fizzy drinks accounted for seven out of ten drinks sold in Mexico. There was a rise of more than 2% last year, despite growing pressure in Congress to slam “sin taxes” upon the drinks. On a per-head basis Mexicans drink more Coca-Cola than any other country.

Lack of exercise—all that traffic means many Mexicans commute for at least two hours a day—is another factor. Though the swanky parts of Mexico City now boast bicycle lanes, parks with exercise machines and graceful boulevards to run along, on the outskirts, where the health problem is gravest, there are few such amenities.

Mr Holland asserts that “economic growth” is a big cause of the illness, especially in developing countries where societies have grown more prosperous in the space of 20 years, compared with hundreds of years in some developed countries. That could be partly true: India and China also have acute diabetes problems. Mexico, however, has not grown faster than other countries in Latin America, and the poor left behind by economic growth are just as likely to snack badly as the more prosperous. What’s more, Mexican-Americans in the United States are almost twice as likely as non-Hispanic whites to be diagnosed with diabetes, which suggests there are powerful genetic factors at work, too.

Perhaps for Mexicans the biggest problem is living next door to the United States, which means the fast food and super-sized culture has a particularly strong influence. So do the American food and drink giants who sell vast quantities south of the border and have already proved adept at fending off sin taxes and other forms of anti-obesity regulation in the United States.

In a country like Mexico where there is not much stigma attached to being overweight, there would probably be stiff opposition to regulating consumers’ behaviour, especially as measures such as higher taxes on soft drinks would fall disproportionately on the poor. Instead, the government should play up gluttony as a killer, as it does with cigarettes—especially in school, where a third of children are said to be obese—and literally scare people off their junk food. Diabetes provides that opportunity. Given Mexico’s extensive public health-care system, the state foots the bill for the sharply rising cost of diabetes treatment. There is huge public interest in giving it more prominence.

Salma Hayek's Diabetic Pregnancy Problems

Salma Hayek before her pregnancy and diabetes problems

Salma Hayek is one of Mexico’s finest movie exports and quickly became a sensation. Born in Veracruz in 1966 and raised by a wealthy family, her parents were shocked when she opted to drop out of university in Mexico to pursue an acting career.

Hayek exploded onto the international stage with her role in 1995’s ‘Desperado’, playing the love interest of the nameless protagonist portrayed by Antonio Banderas. Further success in movies such as ‘From Dusk Til Dawn’, ‘Fools Rush In’, ‘Dogma’ and ‘Bandidas’ with good friend Penelope Cruz followed and she established herself as one of Hollywood’s most sought after actresses.

Thos previously menti0oned popularist titles elevated her to household name status but perhaps Salma’s defining moment was her portrayal of Mexican painter Frida Kahlo in the move ‘Frida’. Her performance earned her an Academy Award nod and although she didn’t win the Oscar for best actress, the movie did go on to claim two awards.

Despite her many great accomplishments in the film industry Hayek‘sproudest moment was giving birth to daughter Valentina in September 2007, especially after complications developed during her pregnancy. When Salma was diagnosed with gestational diabetes, she admits she had no idea what it meant or what she should do about it.

Salma Hayek's weight gain during pregnancy was caused by diabetes

In an interview with U.S. Glamor magazine, Hayek said: “I had diabetes while I was pregnant.

I became huge.

And I said: ‘This is what it takes for me to have this baby, and I really want it.’”

She was aware of the risks involved for her unborn baby but she wanted to have her child so much that she took the chance.

You don’t know it it’s going to be healthy – you are completely out of control.”

Salma Hayek with her baby daughter

Fortunately her daughter was born healthy and Hayek felt the whole experience was incredibly humbling.

Her family has a history of diabetes and she was unlucky to develop the illness as well. Women are usually tested for gestational diabetes between 24 and 28 weeks into their pregnancy. Women who have a family of history of diabetes are usually tested earlier.

Salvia divinorum: A legal trip

Salvia — also referred to as Sally D, Magic Mint, Shepherdess’ Herb, Ska Maria Pastora, Diviner’s Sage or Sage of the Seers — is a powerful hallucinogenic herb that has been used by Shamans for centures for spiritual purposes and which is now gaining popularity in modern Western culture, particularly among teenagers.

The active ingredient in the salvia herb — commonly found in Mexico, Central and South America — is Salvinorin A, one of the most potent naturally occurring hallucinogenic chemicals.

How is Salvia used?

The traditional method is to chew the leaves, and although this is still practised today, the most popular form of ingestion is to smoke the dried leaves using a water pipe, with the drug taking effect almost immediately and the high lasting between one and five minutes. It can also be consumed as a liquid extract.

What are the effects?

Users may experience uncontrollable laughter, merging with or becoming objects, visual distortions, overlapping realities, disorientation and dizziness. Synesthesia is also possible, where physical sensations become intertwined and it is possible to ‘hear’ or ‘taste’ colors and ‘smell’ music.

Although the media often compares the effects of salvia with LSD, there are two essential differences: LSD is a synthetic compound and the effects can last for hours, whereas Salvia is a natural herb and the effects last only a few minutes to an hour.

The  Salvia divinorum User’s Guide emphasizes that the herb is not a “party drug” and goes on to say: “Salvia is not ‘fun’ in the way that alcohol or cannabis can be. If you try to party with salvia you probably will not have a good experience.

“Salvia is a consciousness-changing herb that can be used in a vision quest, or in a healing ritual. In the right setting, salvia makes it possible to see visions.

“It is an herb with a long tradition of sacred use. It is useful for deep meditation. It is best taken in a quiet, nearly dark room; either alone, or with one or two good friends present.”

Is it legal?

Salvia divinorum is legal in most countries.

Although it is not regulated by the United States Government, the Drug Enforcement Administration (DEA) regards the herb as a “drug of concern”, and is monitoring reports of abuse.

Read here about the video circulating the internet which shows Miley Cyrus smoking Salvia.

Images: Wikimedia Commons

Hard Candy Fitness: Madonna opens new gym in Mexico

The Queen of Pop, known for her love of exercise and her toned physique, has just opened her first Hard Candy gym in Mexico, treating a selected group of members to a dance class with her at the launch event.

The name is taken from her 11th studio album and is, she said, the perfect combination of “hard body” and “eye candy”.

“It’s a sexy name that gives you the opportunity to have fun and to build strength as far as the imagination will allow,” the 52-year- old fitness fanatic said.

With her bulging biceps and veiny hands — and witihout the slightest hint of fat adorning her toned and trim body — Madonna has been scrutinitzed in the past for taking her rigorous exercise and diet regime too far.

Interestingly, just as the singer is planning to open a series of new gyms, she was recently quoted by the Daily Mail as saying: “No more pumping iron, no more Stairmaster, no more treadmill. I’m gym-free. I’m liberated!” Hardly the best publicity for her new business venture.

She apparently still follows a gruelling six-days-a- week fitness regime, but the focus has shifted to Ashtanga yoga, which is an aerobic form of power yoga, and pilates. The star said: “I mix it up – Pilates, yoga. I do it six days a week. Actually, Sunday is horse riding. There is no such thing as a day off.”

Being such a yoga devotee, it is no surprise that tremendous effort has gone into training the yoga instructors in different styles, inspired by the knowledge she has gained during her travels. The yoga room will also be equipped with a special wall used in Iyengar yoga, with ropes and steps to help people who are not so physically agile. There will also be a balcony with plants and Zen-like decor.

Madonna’s involvement in designing the concept was very hands-on and she “chose the graphics, colours, the machines. She has weighed in on the choreography of all the classes and given them a twist to make them more dynamic, more special and to better reflect her style,” said Chris Dedicik, who helped her created the gym.

The monthly membership is 2,000 pesos a month, about $160, and is in the same price category as the best gyms in Mexico City.

Read here about why celebrities love yoga.

Images: reallyrich.com and madonnascrapbook.blogspot.com