MEXICO: Soft drinks firms slam tax hike - report

By just-drinks.com editorial team | 12 December 2006

Mexican soft drink makers yesterday (11 December) reportedly urged the country's politicians to reject a proposed tax increase, saying it would affect consumers on low incomes.

The National Association of Soft Drink and Carbonated Water Producers took out a full-page ad in Mexican newspapers in which they claimed the proposed 5% tax hike - which would come on top of VAT at 15% - would result in plummeting demand.

The move would also result in the loss of 5,800 direct jobs, 30,700 indirect jobs and a reduction of 73,200 metric tons in the demand for sugar, the industry group said.

The tax rise was included in the US$205bn 2007 budget proposal which requires approval by both houses of Congress in the country. The tax, proposed by President Felipe Calderon, has been introduced as an alternative to a so-called 'fructose' tax of 20% currently applied to drinks made with sweeteners other than cane sugar.

Sectors: Soft drinks, Water