April Merleaux: The Mexican Soda Tax Debate

We welcome to the blog a post by April Merleaux, author of Sugar and Civilization: American Empire and the Cultural Politics of Sweetness. In the weeks and months after the end of the Spanish-American War, Americans celebrated their nation’s triumph by eating sugar. Each of the nation’s new imperial possessions, from Puerto Rico to the Philippines, had the potential for vastly expanding sugar production. As victory parties and commemorations prominently featured candy and other sweets, Americans saw sugar as the reward for their global ambitions. Merleaux demonstrates that trade policies and consumer cultures are as crucial to understanding U.S. empire as military or diplomatic interventions. Connecting the history of sugar to its producers, consumers, and policy makers, Merleaux shows that the modern American sugar habit took shape in the shadow of a growing empire.

In a previous post, Merleaux reflected on how sugar is historically tied to race, violence, and childhood. In today’s post, Merleaux describes the effects a Mexican soda tax may have on both the Mexican economy and consumer autonomy.

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Last year Mexico became the first nation in the world to impose a surtax on sweetened soft drinks. Policymakers justified the move by pointing out that people in Mexico consume more soda per capita than anywhere else in the world, a trend they argue fosters the nation’s high rates of obesity and diet-related disease. While governments around the world have also used economic incentives—or, in this case, disincentives—as a means of bolstering public health, Mexico’s soda tax does so on a much grander scale. A year later, in July 2015, public health researchers reported that consumption of soft drinks in Mexico fell by more than five percent. Many people hope for similar measures in the United States. California and New York are considering similar policies. New York City tried something similar a few years ago, before a judge overturned it, and the Navajo Nation just passed a junk food tax.

But the great Mexican soda tax debate can be viewed in a wider context than public health policy. It is, after all, also about the politics of capitalism and global trade.

For most of the last few centuries, cheap sugar has been both good business and good politics. As I note in Sugar and Civilization: American Empire and the Cultural Politics of Sweetness, cheap sugar fed a growing working class in the 19^th and 20^th centuries in Mexico, the United States, and elsewhere throughout the world. Since the 1700s, governments across the globe have gone out of their way to keep sweets cheap and plentiful. Indeed, throughout the 20^th century, Mexican politicians kept Mexicans’ sugar bowls full of inexpensive refined sugar, as did their U.S. counterparts. Sugar was widely assumed to be both pleasurable and healthful, and prices were kept low through a host of public policies and economic measures. Until the late 1930s, only a few cranks questioned the received wisdom that sugar was a healthful “fuel food.”

In an era when labor stoppages happened regularly, when revolutions shook the foundations of political stability, when food riots threatened to bring the economy to a standstill, cheap food was one of politicians’ main weapons in maintaining social peace. Especially at moments of social upheaval, cheap sugar promised to hold off the socialists, the communists, the anarchists, and the saloonkeepers. Cheap sugar and low wages went hand in hand in the United States, Mexico, and in many parts of the globe.

At a fundamental level, cheap food—including cheap sugar—has long enabled policymakers to avoid more radical reforms that might have redistributed resources or otherwise called into question the core tenets of capitalism. Cheap food has made it easier for employers to pay relatively low wages without undermining their workers’ productivity. In economists’ terms, cheap food keeps the cost of reproducing the labor force low.

Even during the Great Depression of the 1930s, when U.S. policymakers designed a new sugar commodity program to raise prices paid to sugar farmers, they still insisted that consumers had a paramount right to buy cheap sugar.

So why is Mexico bucking centuries of political wisdom by making sweets more expensive? Officials claim that cheap food—especially cheap sweeteners—are now raising the cost of reproducing the labor force because they must absorb the costs of healthcare and reduced productivity from diet-related disease. People just can’t stop drinking sugary sodas. The tax is for their own and society’s good, the reasoning goes.

Proponents of the soda tax remind me of policymakers in the early 20^th century who worried that riots might break out if they could not meet urban immigrant working class consumers’ insatiable appetites for sugar, a concern that was laced with ideas about racial inferiority. Of course it’s not an exact analogy. But I nonetheless feel cautious about a policy that places so much emphasis on the bodies and consumption habits of poor people and people of color without also considering the broader political economy of food.

Because what if the soda tax isn’t just about health outcomes? I suspect that Mexican leaders’ deeper concerns are the lopsided sweetener trade policies with the United States. Over the last decade and a half, Mexico has tried a handful of times to tax drinks sweetened with high fructose corn syrup (HFCS), which is produced entirely by U.S. farmers to the detriment of Mexican cane growers. The United States has repeatedly used the North American Free Trade Agreement and the World Trade Organization to force Mexico to repeal such taxes and accept imports of U.S.-made HFCS. (When I did early research for my book in Mexico City in 2005, it was hard to find products sweetened with anything but sugar. When I returned in 2011, HFCS was in everything). Unlike earlier taxes, the new soda tax does not single out HFCS, and it is explicitly designed as a public health intervention. The public health claims may well be what gives it legs to stand up against a NAFTA/WTO challenge from the United States.

Ironically, since NAFTA opened the border to transnational investments and trade in the late 1990s, a steady stream of U.S. candy and cookie companies have moved production to Mexico. Citing high U.S. costs of both labor and sugar, industry leaders have been especially critical of the decades-old U.S. sugar price support program, which keeps prices higher than the world market. As a result, more and more sweet, cheap food is produced in Mexico, using both Mexican sugar and U.S. HFCS.

Surely all of these cookies, candies, and sodas are not good for anyone, in the United States or Mexico. Still, I worry that soda taxes have too much riding on the appetites of people whose livelihoods are embedded in a global economy that relies on cheap food. Just as cheap sugar was meant to contain popular aspirations during a period of exceptional capitalist expansion a century ago, the soda tax now seems destined to limit rather than expand Mexican consumers’ capacities to seek justice and autonomy.

April Merleaux is assistant professor of history at Florida International University. Her book Sugar and Civilization: American Empire and the Cultural Politics of Sweetness is now available. Follow her on Twitter @merleaux_april.