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.
Consumers also aren’t flocking to untaxed zero-calorie sodas. The market shares of full-calorie Coca-Cola and Pepsi-Cola inched higher last year to 48% and 11%, respectively, according to Euromonitor, another data service.
Antisoda groups aren’t ready to declare the tax a failure and say sales got a boost from unusually warm weather.
And note this:
Even the initial downturn [in soda consumption] only lowered the average Mexican’s daily caloric intake by 6 to 7 calories, or 0.2%, according to the study.
I do not think the correct conclusion is “Mexico’s soda tax is failing,” rather “it can take a very long time to discover whether or not policies are working well.” For instance the tax may be step one in a longer-run beneficial shift in norms, or going the other way the tax may end up as irrelevant or possibly even counterproductive, if individuals end up substituting into something even less healthy. This point about the long run is relevant for assessing the ACA, minimum wage hikes, the euro, various tax cuts, financial regulation, and many many other policies. Relative price effects, secondary consequences, and “chances” of gaming the system are all much higher in the long run than the short.