May 10, 2016 11:00am by David Farrar

Soda sales soar in Mexico after sugar tax!

Sales of soda are climbing two years after Mexico imposed a roughly 10% tax on sugary drinks …

Purchases, however, are rising in Mexico after an initial drop, making the country a key-growth market again for soda giants Coca-Cola Co. and PepsiCo Inc.

Underscoring the resiliency of sugary drinks, the tax of one peso per liter has raised more than $2 billion since January 2014, about a third more than the government expected.

The tax data is the best proxy for sales. So the sugar tax has raised lots of money but not decreased sales, let alone decreased obesity.

While that public-health campaign is long gone, soda makers continue to advertise their products heavily and say it is unfair to single out something representing less than 10% of daily caloric intake.

In NZ they are just 1.8% of daily calories yet the tax and tax brigade insist a tax on soda drinks would reduce obesity. It would be like trying to reduce alcohol consumption by only taxing vodka.

Coca-Cola Femsa SAB, the country’s largest Coke bottler, said last Wednesday that its Mexican soda volumes rose 5.5% in the first quarter from a year earlier. Arca Continental SAB, the No. 2 Coke bottler, reported soda volumes surged 11%.

The turnaround began last year, when Mexican soda-industry volume rose 0.5% after falling 1.9% in 2014, said data service Canadean.

So as is often the case a small initial impact, that then disappears and reverses.