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20 August 2020
The labelling of pre-packaged food and non-alcoholic beverages has evolved considerably in the past 12 months. In October 2019 Congress proposed the first amendments to the General Health Law regarding food and beverage labelling in order to provide a legal remedy to the national obesity epidemic.
On 1 October 2019 the Health Commission Report and a Draft Decree Amending and Adding New Provisions to the General Health Law, regarding excessive weight, obesity and the labelling of food and non-alcoholic beverages, was published in the Parliamentary Gazette of the Chamber of Representatives.
Arguably, the draft decree's most relevant amendments concern Articles 115 Section VII, 159 Section V, 210, 212 and 215 Section V of the General Health Law. In addition to reducing the levels of sugar, fat and sodium prescribed under the basic food standards, the draft decree proposed introducing various requirements designed to:
Under the draft decree, the labels of pre-packaged foods and non-alcoholic beverages would have to include nutritional information – including indications of whether the product exceeds the recommended levels of sugar, saturated fat, sodium and other nutrients considered 'critical' – that is not only easily understood, true, direct, simple and visible, but also separate from ingredient information. Specific wording and pictograms would also be permitted on food and beverage labels.
The draft decree also obliges the authorities to uphold international treaties and conventions relating to food and beverage marking and labelling to which Mexico is a signatory.
The draft decree's proposals were reflected in the amendments to the General Health Law published in the Federal Official Gazette on 8 November 2019. However, some of these amendments could be considered violations of treaties and agreements entered into by Mexico, including free trade agreements.
On 11 October 2019 the draft amendments to the Norma Oficial Mexicana (Official Mexican Standard) on General Labelling Specifications for Pre-packaged Foods and Non-alcoholic Beverages – Commercial and Health Information (NOM-051-SCFI/SSA1-2010) were published in the Federal Official Gazette.
The draft amendments essentially aimed to adapt the provisions applicable to the marking and labelling of foods set out in the draft decree.
The most relevant amendments included new and broadened definitions of sugars, differences between original products and substitutes, new nutritional 'seals' and several warning captions.
The draft amendments proposed that nutrition labels must be added to products:
A nutrition label would need to be included on the front of such a product and be appropriately sized, visible and distinctive to allow consumers to easily determine its nutritional content and possible health risks.
On 27 March 2020 the amendments were officially published in the Federal Official Gazette and are scheduled to enter into force on 1 October 2020, 1 October 2023 and 1 October 2025, respectively.
In addition, on 19 June 2020 diverse clarifications to the NOM-051 were published in the Federal Official Gazette. This explanatory note modified erroneous references in NOM-051, including in relation to the nutritional declaration of vitamins and minerals and the characteristics of the icons in products with a main exhibition surface smaller or equal to 5cm2.
Based on the above provisions, the competent authorities are expecting industry players to comply by 1 October 2020. However, many companies will find compliance difficult due to the time required for organising new packaging materials, designs, production processes and getting products into retail outlets.
Arguably, some of these provisions may be challenged based on numerous constitutional violations, not only at the substantive level of the provisions themselves but also at the level of their application by the authorities.
The proposed strategy to combat obesity in Mexico has also led to expected amendments to various tax provisions – in particular, to the Law on Special Taxes on Production and Services, which will be modified by implementing a model of so-called 'gradual tax' on products containing high amounts of sugar.
This strategy expects the food and beverage industry to reformulate its products and not only transfer or tax the products, creating an additional cost for consumers, but also reduce the demand for products containing high amounts of sugars.
The aim is to establish an ad valorem tax; that is, a percentage of the tax calculated on the final price of each product, avoiding strategies to circumvent the tax by adapting it to the inflationary effect and other variations directly relating to the price of the products.
For example, within the proposed amendments, the rates applicable to flavoured drinks could be added based on the grams of sugar added per 100ml of product, which can range from 5% to 20%.
Mexico is suffering from a national obesity epidemic; however, it is debatable whether the solution is stricter product marking, labelling and taxation or an approach focused on developing healthier habits and education. The health authorities' latest strategy on food and beverage labelling will likely have a significant economic impact on the food and beverage industry and could be considered a violation of international treaties and agreements.
Time will tell whether the strategy is an effective remedy to the national health crisis or merely a blow to the food and beverage industry that increases prices and decreases the quality of products for human consumption.
For further information on this topic please contact José Alberto Campos Vargas, Maria Luisa Mendoza or Laura Sánchez Barrón at Sanchez-DeVanny Eseverri SC by telephone (+52 55 5029 8500) or email (email@example.com, firstname.lastname@example.org or email@example.com). The Sanchez-DeVanny Eseverri SC website can be accessed at www.sanchezdevanny.com.
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