After Law 2277 of 2022 was approved, Healthy taxes were established in Colombia for ultra-processed sugary drinks and ultra-processed food products, with high levels of added sugars, sodium or saturated fats.
According to the most recent Kantar study, The three most affected categories in terms of purchase volume were liquid tea, flavored milk and chocolates/chocolate bars, with decreases in the size of sales which ranged between 5% and 20% during the first two months of the implementation of the tax.
The firm also observed a 14% increase in total spending on the ultra-processed food basket, compared to the previous year. “This contrasts with a 9% increase in the disbursement of other categories that were not subject to taxes,” the entity explained.
Kantar noted that households are reducing the frequency of purchasing taxed products, which led to a 6% decrease in one quarter. “Some consumers have chosen to migrate towards cheaper brands, which has already resulted in a 1% increase in their market share.”
“The tax not only impacts the basket of ultra-processed products, but can also impact categories not subject to this tax. This is because families can choose to stop buying untaxed products to maintain the consumption of those who do have them, but who consider them essential in their purchases,” explained John Studerus, manager of advanced analytics at Kantar.
In fact, during the investors conference of Nutresa Group, carried out at the end of February of this year, President Carlos Ignacio Gallego announced that healthy taxes affect 93% of his range of products in the ice cream category with Ice Cream; 73% to the chocolate division, with brands such as Jet, Corona and Chocolisto; 41% in the sausage division and meat derivatives, with brands such as Ranchera, Zenú and Pietrán; and the cookies category in 31%, with Noel products.
One of the effects caused by this tax imposition has been that the Colombian consumer changed their ways of purchasing drinks and food, whether stopping buying products with the healthy tax or purchasing other cheaper brands to compensate for the increase in the final price of the former.
How does this tax work?
According to Dian, the tax rate on ultra-processed sugary drinks is expressed in pesos per hundred milliliters of drink. If there are less than six grams of added sugars in 100 ml of beverage, the tax does not apply; If the amount of sugars is between six and 10 grams, $28 and $38 must be paid in 2025; and if it is equal to or greater than 10 grams it will be $55 and $65 for next year.
In the case of ultra-processed foods, the application of the tax varies depending on whether it involves added sugars, sodium or saturated fats. Regarding sodium levels, take a portion of the food and divide the reported sodium content by the number of kilocalories. If this ratio is greater than one (1), it will be subject to tax. You must also calculate the sodium content in 100 g and if this exceeds 300 mg, you will be subject to the tax. It is sufficient that one of the two conditions is met for it to be applicable.
For saturated fats, multiply the amount of saturated fat in grams by the fat conversion factor (9 kcal/g) in any amount of food. The result is divided by the total kcal of the same amount of food and multiplied by 100. This is compared to the total energy from saturated fats; if it is equal to or greater than 10%, it will be subject to the tax.
