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Friday, October 25, 2013

Mexico And The US Compete For The Fattest Country Award

Mexico And The US Compete For The Fattest Country Award

Mexican industrialists defended the role that packaged food and beverage companies play in the national diet Monday amid rising concerns about belly fat.

Mexico's latest national survey on health and nutrition showed in 2012 that seven out of 10 adults in the country are either overweight or obese, while diabetes and other chronic illnesses are on the rise, sparking debate among politicians about steps the government could take to address a growing public health crisis.

Proposals on the table include a special 20% tax on sweet, fizzy soda--the beverage already carries sales tax--or extending the 16% sales tax to all processed food. Any such expansion in food taxes is expected to be folded into the federal government's fiscal reform proposal, due for unveiling in September, as the oil-revenue reliant country seeks to expand its tax base.

Leaders at industrial chamber Concamin representing makers of products such as deli meats, dairy goods and bottled beverages argued Monday that nutritional education, portion control and exercise are the keys to trimming fat, not fiscal remedies.

Mexico's food and non-alcoholic beverage industry represents more than 12% of gross domestic product and employs over 800,000 Mexicans, according to Concamin.

Raul Riquelme, head of Concamin's health commission and head of institutional relations at processed food giant Alfam (ALFA.MX), said the country's food industry is committed to finding solutions. "Obesity and excess weight is a subject that worries all of us Mexicans," he said.

According to a paper published earlier this year by Mexico's National Academy of Medicine, low-income households make purchasing decisions based on consuming the most calories for the least amount of money, even if the nutritional content of the food is poor. Meanwhile, the cost per calorie has fallen dramatically over the past two decades with the proliferation of packaged cakes and salty snacks.

"There's no such thing as junk food, just junk diets," said Felipe Gomez, head of a regional food makers chamber in the state of Jalisco. Even so-called junk food has carbohydrates and calories that the body needs, Mr. Gomez noted.

For countries with rich culinary traditions that date back to the Aztecs and Incas, Mexico and Peru have developed quite a taste for modern food fashions. Mexicans quaff more fizzy drinks than any other country; Peru has the highest density of fast-food joints in the world. Chile, one of the world’s biggest exporters of fruit, doesn’t eat much of it: processed foods account for more than half an average Chilean’s shopping basket. Even in slender Brazil, the eating of sweets and junk food has risen fivefold in 30 years.

Obesity in Latin America: Battle of the Bulge

Not all waistlines have met this barrage of sugar, salt and fat in the same way, but across much of Latin America and the Caribbean the trend stands out like a muffin top. The Food and Agricultural Organisation, a UN agency, says the region has become the most overweight in the developing world. In contrast to 1990, when the fat epidemic took off, far more years of healthy life are now lost in Latin America through overeating than through 

The industrialists worry that a bigger tax burden on processed food will foster growth in black market foodstuffs, possibly posing a threat to public health. Raul Picard, a Concamin leader and owner of a chocolate company, argued that vice taxes on products like alcohol and tobacco have had little impact on consumption in Mexico. Instead, he said, the taxes led to a proliferation in contraband goods of questionable origin.

The most-targeted attack on big food comes from Marcela Torres, a senator with the National Action Party who has proposed a 20% tax on sugary soda. The move is aimed at slashing consumption by 26% while accruing close to $2 billion a year for the treasury. Mexico is the biggest consumer of carbonated beverages after the U.S., according to Euromonitor data.

Ms. Torres said in an interview that a coalition in Congress, including herself, will refuse to support the government's fiscal reform unless it addresses the country's obesity crisis via tax measures.

Emilio Herrera, who represents the soft drink bottlers' association, said in a separate interview that if Ms. Torres' special tax were passed, and if it reduced soda consumption as aimed, the industry could lose thousands of jobs. The collateral impact would be worse, Mr. Herrera warned, as Mexican soda bottlers are the country's biggest purchasers of domestic cane sugar and around three-quarters of soda is sold via small mom-and-pop shops that treat the product like their "spinal cords."

Already taxes on soda supply the Treasury with more than $1.5 billion a year in revenue, Mr. Herrera said, arguing that an additional tax might only lead consumers to migrate to other sweet beverages, such as flavored water, that gives them similar satisfaction and likely the same caloric intake.

Currently soda accounts for around 5.5% of Mexicans' daily calories, Mr. Herrera said, citing studies showing that while caloric intake has held steady in recent years, lifestyles have become increasingly sedentary in Mexico.

The industrialists promised that various big food companies are working to reformulate products, expand their offerings of healthy options and promote items in smaller package presentations. At the same time, "the industry is always going to place products based on consumer demand, and this is a country geared toward consumer taste for high calorie and sugary content," said Rodrigo Alpizar, head of social responsibility at Concamin.

Since the industrialists view exercise as crucial to Mexico's battle of the bulge, Alpizar said they plan to spend around $500,000 to establish a new outdoor park in Mexico City.

The bustle of life in and around the congested Mexican capital, where a fifth of the population resides, strains eating and lifestyle decisions, consumers here say.

"We all go out to work and eat the first thing we see," said Patricia Juarez, a nurse, student and mother of two who says she's away from home sometimes 16 hours a day. "If you have time to exercise, fine. If not, just be chubby," she said after polishing off a torta sandwich slathered in heavy cream and mayonnaise a few steps from Mexico City's main avenue, Reforma.

Congress's lower house of Congress passed late Thursday a special tax on junk food that is seen as potentially the broadest of its kind, part of an ambitious Mexican government effort to contain runaway rates of obesity and diabetes.

The House passed the proposed measure to charge a 5% tax on packaged food that contains 275 calories or more per 100 grams, on grounds that such high-calorie items typically contain large amounts of salt and sugar and few essential nutrients.

The tax, which was proposed just this week, is sure to stir controversy among big Mexican and foreign food companies that operate here. It comes on top of another planned levy on sugary soft drinks of 1 peso (8 U.S. cents) per liter that was passed by the same committee, an effort that New York Mayor Michael Bloomberg supported.

The taxes—both aimed at curbing consumption—have broad political support and were expected to later be approved by the Senate as part of a sweeping tax overhaul. The snack food levy is part of a bigger tax proposal from President Enrique Peña Nieto which aims to raise the government's non-oil tax collections.

The taxes would put Mexico, a country notorious for its love of sweets, fried foods and pastries, on the cutting edge of government efforts to cut obesity rates.

"This appears to be the most aggressive strategy anywhere in the world in recent years to improve diets via tax disincentives," said Michael Jacobson, executive director of the Center for Science in the Public Interest in Washington.

Harold Goldstein, executive director of the California Center for Public Health Advocacy, called Mexico a role model, saying that the measures could protect the health of consumers while also shielding the economy from productivity losses and runaway public health costs.

Seven of 10 adults in Mexico, and a third of children, are either overweight or obese. Mexicans have now surpassed Americans for the title of the fattest country in the OECD, according to the organization.

All that fat has contributed to an alarming rise in chronic illnesses like adult-onset Type 2 diabetes, which afflicts an estimated 15% of Mexicans over the age of 20, the highest rate for any country with more than 100 million inhabitants. Illnesses related to excess weight cost the Mexican public health system more than $3 billion a year, according to the legislation.

On virtually every street corner in Mexico, makeshift stands sell the types of packaged items that will be taxed for the first time: potato chips, cookies, ice cream, fried corn chips, chocolates, candy, puddings and local sweets.

"We're a country of malnourished fatsos," José Antonio Álvarez Lima, a former state governor turned newspaper columnist told Mexican political news website Animal Politico. He pegged part of the blame for Mexico's high consumption of soda and snacks on incessant TV advertisements and poor education.

Mexico is Latin America's biggest consumer per-capita of sweet and savory snacks, and the world's top consumer of pastries, according to Euromonitor International, a consultancy.

Those habits have helped turn Mexico City-based Grupo Bimbo, the owner of U.S. brand Sara Lee, into a global leader in packaged foods. The country is also an enormous source of revenue for processed snack-making multinationals like PepsiCo Inc., owner of the popular Mexican potato chip maker Sabritas. Neither company responded to requests for comment.

The Tax Has Its Detractors

Mexican industrial chamber Concamin estimates that processed food companies targeted by the new tax employ thousands of Mexicans and account for 4.1% of GDP. "We can't allow last-minute taxes," said Concamin president Francisco Funtanet, suggesting that companies might cut back on personnel and investment to absorb the tax hit.

Raul Picard, a top official at Concamin and owner of a chocolate company, argued that vice taxes could lead to a proliferation in contraband goods of questionable origin, possibly posing a threat to public health.

"There's no such thing as junk food, just junk diets," said Felipe Gómez, head of a regional food makers' group in Jalisco state. Even so-called junk food has carbohydrates and calories that the body needs, Mr. Gómez argued.

Academics say the move could hurt the poor because they spend a greater percentage of their income on cheap, packaged foods, but added that doing nothing was worse.

"Nobody can deny that we have a big problem with fat and obesity," said Felipe Vadillo, a medical doctor and researcher at Mexico's national university, UNAM. Mr. Vadillo co-authored a book on public policy options for tackling obesity that highlights how Mexico's poor are hardest hit by the country's plethora of cheap options of high-calorie, low-nutrition foods.

Some ordinary Mexicans said a tax was unlikely to change their eating habits much.

Héctor Ortega, a 45-year-old operator of a street stand in downtown Mexico City, predicted that consumers may pull back briefly when prices rise, but then return to their old habits.

"Just like the cigarettes, people will go back to their old habits," said Mr. Ortega. He said junk food was obviously unhealthy, but it was often the only thing that poorly paid office workers and students can afford. "This is a restaurant zone and the food here is expensive. For some people, these products are the only food available."

Fernando González, 24, an office worker who frequents Mr. Ortega's stand, is a big fan of sodas and gum, in particular. When the new prices kick in, he said, he won't give up on his favorites, but will probably buy less chips and candy.

"It's a craving, it's an addiction, it's something people enjoy," he said of Mexicans and their treats.

While striking down plans to tax school fees, rents, home sales and mortgage interest, legislators upheld a proposed 1 peso ($8 U.S. cents) tax per liter of sugary beverage. They also supported a 10% capital gains tax and raised the maximum income tax rate to 35% for people earning over three million pesos ($235,000) a year. The current top rate is 30%.

They also agreed to raise the sales tax in border regions to 16% from 11%, bringing it in line with the rest of the country, while closing a number of corporate tax loopholes and eliminating many tax deductions.

Americans may get bad press for being fatties, but our southern neighbors are giving us a run (or maybe a slow walk?) for the money.

Statistics from the Organization for Economic Co-operation and Development (OECD) say close to 70 percent of Mexicans ages 15 and older are overweight while nearly one-third of the population is obese – which is creating a slew of long-term health issues, like adult-onset diabetes. And Mexico's government is saying ¡Ya basta!, enough is enough.

Late Thursday, the nation's lower house of Congress passed a controversial measure to charge a five percent tax on some high-calorie snack foods. The Mexican Senate is expected to approve the bill, which has set off a loud debate between food companies and health activists.

Mexico's plan to wean its citizens off junk foods “appears to be the most aggressive strategy anywhere in the world in recent years to improve diets via tax disincentives," Michael Jacobson, executive director of the Center for Science in the Public Interest in Washington.

But the bill's opponents say the tax would endanger millions of jobs in Mexico, all along the food and sugar production chain. In an interview with The New York Times, the director of Anprac, Mexico's $15 billion soft drink industry, said the government had not properly “evaluated the collateral damage of this inefficient tax” – which if enacted, he said, would simply drive Mexicans to make sweet drinks at home.

Mexicans have a well-established love of candies, pastries, fried foods and sugary soft drinks. And that love has boosted revenues for beverage and snack food producers like Coca-Cola and PepsiCo. It's also helped Grupo Bimbo, the Mexico City-based owner of America's Sara Lee brand, become one of the giants in the multinational packaged foods industry.

But even if the junk food tax is enacted in Mexico, many doubt it will seriously curb the country's sweet tooth.“People will continue to sell and buy Coca-Cola for the rest of our lives,” Rafael Venegas, who has a corner store in Mexico City, told the Times. “We have it in our DNA.”

Rosa Isela Sandate kicked her drinking habit about six months ago and swears she will never go back.

“I used to drink three or four a day,” she said.

She would down a Coke or a Boing!, a tooth-jangling sweet local drink, at every meal. Her belly grew so big that diners at her lunch stand thought she was pregnant and warned her against working too close to the grill. “They said, ‘Take very good care of the baby, the heat will hurt it,’ ” she said.

It was hard banishing the sugary drinks, recalled Ms. Sandate, 31, nursing a large bottle of water, but the effort paid off. She has lost 13 pounds.

The government would like more Mexicans to follow Ms. Sandate’s example. In a bet against an epidemic of obesity and diabetes, President Enrique Peña Nieto has proposed a tax on sales of all sugary drinks. If it goes through, the tax will make Mexico a rare test case of a national soda tax directed at a severe obesity problem.

The proposal has set off heated arguments in Mexico, but in the middle of the debate is an anti-obesity crusader from New York, Mayor Michael R. Bloomberg.

Beyond his push to limit the sale of large sugary drinks in his own city, Mr. Bloomberg’s foundation is helping to finance the drive to curb them in Mexico as well.

Its three-year, $10 million grant is being used to support anti-obesity advertising campaigns, finance research at Mexico’s National Institute of Public Health and promote policies like the soda tax, nutrition labeling and controls on junk-food television advertising aimed at children. The foundation, Bloomberg Philanthropies, calls its work in Mexico a pilot project that could be adapted to other developing countries if it is successful.

The “general strategy has been to look where there is a very high burden,” said Dr. Kelly Henning, who heads the foundation’s public health programs. In Mexico, she said, soda is “a very big piece of the puzzle.”

With a cry to fight foreign intervention, the anti-tax contingent here has seized on the mayor’s role to discredit the soft drink proposal, branding it “the Bloomberg tax.”

The proposed tax, which Congress is scheduled to vote on this week, has set off a lobbying blitz. Lining up for it are public health experts and activists. On the other side are multinational soft drink companies and billionaire bottling magnates, as well as small-scale sugar cane farmers and neighborhood store owners.

“It’s not our fault that Mr. Bloomberg doesn’t have anything else to occupy his time,” said Cuauhtémoc Rivera, the president of a national association of corner stores that has bought multiple newspaper ads criticizing the tax. “He’s so rich that he is trying to teach Mexicans how to eat and drink.”

The Bloomberg money has given some unaccustomed advertising punch to health activists. Over the summer, one of the organizations receiving money from Bloomberg Philanthropies, Consumer Power, touched a nerve by running a billboard and radio campaign in Mexico City with other activists that asked, “In your right mind, would you give your child 12 teaspoons of sugar?” — the quantity in some soft drinks.

“It’s very difficult to get financing here because the business sector acts as a monolith,” said Alejandro Calvillo, the director of Consumer Power, who has become the target of anonymous YouTube attacks describing him as a Bloomberg stooge.

Mr. Calvillo says he has been stymied in his effort to buy television airtime for a new ad, which proposes that the money raised by a soda tax should go toward installing drinking fountains in schools.

One national network stalled, he said; the other rejected it.

Almost 70 percent of Mexicans are now overweight, and about a third are obese, according to the World Health Organization, about the same proportions as in the United States. Like much of the world, Mexicans exercise less and eat more fat and sweets than they used to. Calorie-laden foods that were once Sunday treats, like tamales or breakfast pastries, are part of the daily diet.

And there is a special place at the table for soft drinks: on average, Mexicans consume about 40 gallons a year, according to the industry, close to the amount in the United States.

At the market in Xochimilco, a Mexico City borough, Coke is simply everywhere, its red logo decorating tablecloths, refrigerators, handwritten display menus, even the walls.

Even in the afterlife, it is essential. Joaquín Praxedis Quesada, an anthropologist who works for the borough, pointed out what families place on the altars to departed relatives on the Day of the Dead. “There are tamales, cookies, seasonal fruit — and a soft drink,” he said. “When a culture integrates soft drinks into the most sacred, which is its relationship with its ancestors, then they are part of its identity.”

In recent years, officials have stepped in, limiting what schools could sell at recess, and putting Mexico City’s heaviest police officers on reduced-calorie diets. 

Opponents of the tax have bought newspaper ads to argue that the soda tax “demonizes” one cause of an epidemic that has many. Other ads warn that the tax could put 3.5 million jobs at risk, beginning with sugar cane workers and the struggling owners of tens of thousands of mom-and-pop stores.

Mr. Rivera said everybody in the “production chain,” including the soft drink companies, had contributed to a fund to pay for the ads.

Emilio Herrera, director of Anprac, the trade association representing the $15 billion soft drink industry here, said a tax would not do any public good because people would simply switch to homemade sweet drinks. The government has not “evaluated the collateral damage of this inefficient tax,” he said.

Arantxa Colchero Aragonés, a researcher in the Health Economy department of Mexico’s National Institute of Public Health, estimated that a 10 percent tax would reduce sugary drink consumption by 10 to 13 percent, with enough people switching to water and milk to bring down overall rates of obesity.

“The industry is right that they aren’t the only guilty ones,” said Juan A. Rivera Dommarco, the director of the Center for Research and Nutrition at the institute. “But they do have part of the responsibility.”

The government envisions a tax of about 7.7 cents per liter, which is half of what public health advocates would like.

The soft drink industry argues that it is working to teach consumers how to control their weight, with Coca-Cola de México sponsoring a national high school soccer tournament.

Still, many Mexicans say that soft drinks are far from harmless, though that does not mean they have summoned the strength to give them up.

“We’re making the ones who are poisoning us rich,” said Isabel Valenzuela, 67, who drinks one or two soft drinks a day. “I curse it and drink it. They have me hooked.”

Agustin Rumayor, 48, a deliveryman sipping a Coke with lunch, agreed. “Maybe I would consider drinking less if the price goes up,” he said. “But you do need a lot of willpower.”

Rafael Venegas, 40, said he sells about $100 of soft drinks a day at his corner store in a working-class neighborhood of Mexico City, and although he dutifully put up the anti-tax sign his Coke distributor handed out, he doubts the tax would make a dent.

“I think it’s like chile,” said Miriam Toledo, who runs a small restaurant. “Just like you can’t eat without spices, you can’t eat without a soft drink.”

Monty Henry, Owner

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