October 20, 2015 / 2:14 AM / 3 years ago

Mexican lower house votes to lower tax on sugary drinks

MEXICO CITY (Reuters) - Mexico’s lower house of Congress on Monday approved a proposal to cut taxes on some sugar-sweetened drinks despite concerns the move would hinder the fight against obesity in Latin America’s No. 2 economy.

Mexicans are among the world’s biggest drinkers of sodas made by companies like Coca-Cola Co and PepsiCo Inc, and in 2013, the country became the first major market to tax high-calorie soft drinks, by 1 peso ($0.06) per liter.

The 500-strong lower house voted 423 to 33 to give general approval to a package of fiscal measures that included a 50 percent cut in taxes on soft drinks with less than 5 grams of added sugar per 100 ml.

Once individual reservations to the measures have been worked through, the fiscal package will pass to the Senate.

Those backing the measure argued it would encourage sodamakers to sell soft drinks with less sugar and calories.

The move could support the shares of Mexico-based Coca-Cola Femsa, Coke’s largest bottler in Latin America and the dominant player in the country’s drinks market.

But lawmakers from the center-left Party of the Democratic Revolution (PRD) said they would object to the bill, pointing to some 70 billion pesos ($4 billion) a year the country spends on diseases tied to junk food consumption, including soda.

Mexico has one of the highest obesity rates in the world, with nearly two-thirds of the population considered obese or overweight, according to the World Health Organization.

Reporting by Anna Yukhananov; Editing by Dave Graham and Stephen Coates

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