Mexico's taxes on junk food hurting Pepsi, Coke

In Mexico, PepsiCo (NYSE: PEP) snack sales volume declined by 3 percent in the latest quarter, and The Coca-Cola Co. (NYSE: KO) also has reported beverage declines during the first half of the year, citing a new tax on junk food implemented south of the border.

According to the Associated Press, the recent declines point to the reason why the beverage industry has fought tax proposals on sugary drinks in California. The taxes in Mexico add the equivalent of 7 cents to the cost of a liter of sweetened beverages and the equivalent of 5 cents to the price of high-calorie foods.

An executive with PepsiCo said the declines in Mexico were in line with the company’s expectations, according to the Associated Press.

Read more from the Associated Press.