Taxes up, sales down
It appears that Mexico’s new tax on soft drinks might be having an effect on consumption, judging by the drop in sales at Coca-Cola Femsa and other bottlers.
Sales volumes were down 1.5% for the Coca-Cola bottler, a decline which it attributed to the peso-per-litre tax introduced this year by the federal government. The tax applies to sugary drinks and junk food and is part of a campaign to curb obesity and diabetes, both of which are serious health problems.
Coca-Cola Femsa anticipates a drop in sales between five and seven per cent this year as a result of the tax.
Rivals Arca Continental — Latin America’s second largest Coke bottler after Femsa — and Pepsi have also reported declines in sales. However, all three companies cited weather conditions and a softening of the economy as other contributors to the drop in sales.
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