Bloomberg gets caught up in Mexico soda tax fight

Mexico's President Enrique Pena Nieto has proposed to raise millions from a soda tax, prompting the beverage industry to purchase full-page ads and broadcast media spots opposing the measure.
Mexico's President Enrique Pena Nieto has proposed to raise millions from a soda tax, prompting the beverage industry to purchase full-page ads and broadcast media spots opposing the measure.Eduardo Verdugo / AP file

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By Mark Stevenson

MEXICO CITY — New York City Mayor Michael Bloomberg's name has been drawn into the debate over a proposed 8-cent (1 peso) per liter tax on soft drinks to fund weight-control efforts in Mexico, which now has higher obesity rates than the United States. 

President Enrique Pena Nieto's proposal to raise $950 million from the soda tax has drawn the beverage industry's wrath in the country with one of the world's highest rates of yearly soda consumption; the average Mexican consumes 163 liters, or 43 gallons, of soft drinks annually. In the United States, consumers drank just under 44 gallons a year in 2012, according to trade publication Beverage Digest.

Soft-drink bottlers, retailers and sugar growers have purchased full-page ads and broadcast media spots opposing the measure. The government wants to use tax income to install water drinking fountains in schools, most of which don't have them. 

Some ads target Bloomberg, who unsuccessfully backed a state tax on soft drinks, then a ban on large sodas in New York City. Bloomberg's charity has contributed to Mexican pro-tax groups. 

"No to the Bloomberg Tax," read the large type of several ads published in Mexico in recent days. 

"Bloomberg ... has the right to be crazy, but he doesn't have the right to come here and impose his craziness on us," said Cuauhtemoc Rivera, leader of Mexico's National Association of Small Stores, a little-known business chamber that bought full-page ads in Mexico's main newspapers for several days running. 

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Rivera acknowledges that big soft drink bottlers and sugar growers have contributed to the anti-tax ad campaigns. "Between us all we are financing this campaign," Rivera said. 

Bloomberg Philanthropies says it has donated $10 million in an effort with "top research and advocacy organizations" to support goals such as "raising taxes on sugar-sweetened beverages." But Bloomberg's group would not say how much, if any, of the money went for ads in Mexico. 

The anti-tax side, though, has taken out far more ads than pro-tax advocates. 

The beverage industry is among the biggest retail money-makers and ad buyers in the country. Rivera estimated that soft drink sales account for 40 percent of income at small Mexican stores. 

Mexico's largest soft-drink bottler, Coca Cola-Femsa, says it hasn't purchased any ads in its own name. But Coca Cola-Femsa spokeswoman Guadalupe Gonzalez said in an email that Mexico's National Soft Drink and Bottled Water Producers' Association, to which the company belongs, has run ads, along with cane growers and retailers. 

Supporters of the tax say they have been prevented from buying billboard and television space for their own anti-obesity and pro-tax ads because media companies don't want to alienate bottlers. 

Alejandro Calvillo, head of the nonprofit group Consumers' Power, says two billboard companies turned down his group's print ads. "They told us they didn't want to get into trouble with other advertising customers," he said. 

Calvillo said Mexico's main television networks have also refused to run pro-tax ads. 

The largest, Televisa, said it had no record of receiving a request to buy airtime. 

The other network, TV Azteca, told The Associated Press in a message that a proposed pro-tax commercial "has been reviewed, and there are legal and ethical impediments to airing it," including "several people are portrayed as being doctors" without showing their professional licenses on air.