Taxing Junk Food In Mexico

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Introduction
Mexico is a leading consumer of bottled beverages and pre-packaged snacks. According to PepsiCo, even if the per capita consumption rate of salty snacks for Brazil, India or China is doubled, their consumption levels will be much below those of Mexico (Forbes, 2014). Mexico is still a developing nation but it has a growing middle class. Middle class equals more disposable income which has led PepsiCo to further invest and expand business in Mexico (Forbes, 2014).
Sabritas
Sabritas was founded in 1943 by Pedro Antoinio Mercos Noriega in Mexico City, Mexico as Golosinas y Productos Selectos. In 1966, following the merger of Frito Lay and Pepsi, Sabritas was purchased by the new company, PepsiCo. The name Sabritas is a contraction …show more content…

Mexico has the highest obesity rate in the world at 32.8% and 9% of the population has diabetes (Forbes, 2014). The tax increases the price of foods high in saturated fat, sugar and salt. The tax is paid by the consumer at the time of purchase. If companies like Sabritas are to maintain profit margins, the time is right to introduce new snack foods that contain fewer calories, fat, sugar and salt but it might be a difficult sell. According to José Daniel Pérez, an account director at consumer research firm Kantar Worldpanel, light products are traditionally shunned in Mexico (Guthrie, 2014). Compared to other countries, light options are underdeveloped in Mexico. However, companies will have to get past the general negative connotation that foods labeled light carry in Mexico (Guthrie, …show more content…

It is a welcome addition to meals in Mexico, where it has gained enormous popularity and taken on characteristic Mexican flavors (Graber, 2012). Creating a quinoa chip will help further PepsiCo’s desire to partner with local farmers as quinoa is grown in Mexico. Adding a quinoa chip to the product line will also help meet their innovation goal. A quinoa chip could be baked rather than fried which would help the company’s bottom line as the consumer might not have to pay the current tax on consumption. A quinoa chip could be manufactured with less sugar, salt and fat thereby meeting the standards as set by the Mexican government. A quinoa chip will never be a health food item but in a country that values snacks, it could be viewed as a healthier

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