Free trade and the junk food epidemic in Mexico

Free trade and the junk food epidemic in Mexico

Reaching out to these potential consumers means that food corporations flood in and take over traditional distribution channels, replacing local foods with cheap, processed, junk food, often with the direct backing of some governments Free trade and investment agreements they are a crucial factor in this process of hoarding, substitution and higher profits. The case of Mexico gives us a crude and dark portrait of the consequences that this entails.

Transnational food corporations understand that their main expanding markets are in the global South. They then focus on changing their diets and cornering the markets of the world's poorest people. (Photo: Thierry Collins)

Malnutrition, food insecurity and "diabetes" in Mexico

In Mexico, poverty, hunger, obesity, and disease go together. People not only struggle to pay for enough food to survive; many of the foods you eat make you sick.

In 2012, the National Institute of Public Health of Mexico published the results of a national research related to nutrition and food safety known as the National Health and Nutrition Survey (Ensanut) 1 The Ensanut study was based on the so-called Latin American Scale and Caribbean Food Security, to measure the consumption of less than what is required for a healthy and active life.2 The results make it clear that this problem is much worse than is recognized. Let's look at the graphs and table below.3

The Ensanut report found that from 1988 to 2012, the proportion of overweight women between the ages of 20 and 49 had increased from 25% to 35.5% and obese women in this group increased from 9.5% to 37.5% .4 A A staggering 29% of Mexican children ages 5 to 11 were overweight, as were 35% of boys ages 11 to 19, while one in 10 school-age children suffered from anemia.

The level of diabetes in Mexico also worries. The Mexican Diabetes Federation states that between 6.5 million and 10 million people suffer from diabetes in Mexico and that at least two million of them do not know it. 7% of the Mexican population has diabetes. The incidence grows 21% for people between 65 and 74 years old. Diabetes is the third leading cause of death in Mexico, directly or indirectly. In 2012, Mexico ranked sixth in the world in deaths from diabetes. By 2025, experts say, there will be 11.9 million Mexicans with diabetes. 5

Obesity and diabetes work together; their interaction is so strong that a new name has already emerged: “diabesity”.

"Diabetes associated with obesity is a serious health problem for Mexico and its total cost in our country went from 2 thousand 970 million pesos in 2003, to 8 thousand 836 million pesos in 2010, an increase of more than 290 % in just seven years, ”said Alejandro Calvillo, director of the organization El Poder del Consumidor. "According to the Economic Analysis Unit of the Ministry of Health, it is estimated that the total expenditure for overweight and obesity care in our country can grow from almost 80 billion pesos that are currently needed to more than 150 billion in 2017, ”he also said.6

These data cannot be explained by saying: “people eat differently because they have more possibilities and options”, as some accounts suggest. The reality is that certain foods are imposed on the country, while the foods that people cared for and produced according to their traditions and real needs became more and more scarce.

The NAFTA effect

The various free trade agreements that Mexico has signed over the last twenty years have had a strong impact on the country's food systems. Following his mission to Mexico in 2012, the then Special Rapporteur for the Right to Food, Olivier De Schutter, concluded: “The current trade policies in place favor a much greater dependence on highly processed and refined foods with long shelf life rather than consumption of more perishable and fresh foods, particularly fruit and vegetables ... The emergence of overweight and obesity facing Mexico could have been avoided, or greatly mitigated, if health concerns linked to changing diets had been integrated into the design of policies ”.7

The liberalization of investment brought about by these agreements or treaties is as much a source of the problem as the commercial aspects.

According to Corinna Hawkes, the NAFTA instruments are, in fact, driving crucial, key issues that shape the kind of economic integration that powerful partners drive: “offshoring of global food production and trade; direct investment in food processing and a change in the retail structure (the advent of supermarkets and convenience stores is notable); the emergence of global agribusinesses and transnational food companies; deepening the global promotion and advertising of food. ”8 NAFTA's instruments also promoted the development of global rules and institutions“ that govern the production, trade, distribution, and marketing of food, ”and“ the purchase of of branded products and services ”, something that creates“ incentives for food transnationals to grow through vertical integration and dislocation ”.9

To effectively deal with hunger and malnutrition, Mexico should support its peasants and small-scale producers. (Drawing: Rini Templeton)

NAFTA required Mexico to apply equal treatment to domestic and foreign investors, by removing rules that prevented foreign investors from holding more than 49% of a company. It also prohibited the application of certain "performance requirements" such as a minimum of national content in production. The new laws that could have brought foreign investments under control once they were established were disabled by the notorious chapter on conflict resolution between the State and investors.

NAFTA triggered an immediate torrent of foreign direct investment (FDI) from the United States to the Mexican processed food industry. In 1999 "US companies invested 5.3 billion dollars in the food processing industry, an increase of 25 times the 210 million invested in 1987, and more than double the 2.3 billion the year before NAFTA." says researcher Corinna Hawkes. Between 1999 and 2004, “roughly two-thirds of the $ 6.4 billion in FDI in the food and agriculture industries came from the United States. About ¾ of that FDI went to processed food production, stimulating significant growth in the sector. Between 1995 and 2003, sales of processed foods expanded by 5-10% annually in Mexico ”.10

Sales of baked flour, dairy, junk food and snack products grew far faster than any other category, particularly soft drinks. 8-ounce servings of packaged sodas, juices, and preparations increased from 275 per person per year in 1992 to 487 servings per person per year in 2002.11

Mexico is now one of the top ten processed food producers in the world, and all the major transnational corporations in the industry, such as PepsiCo, Nestlé, Unilever and Danone, have expanded their huge Mexican operations.12

These companies are making a ton of money. Total sales of processed foods in Mexico in 2012 was in the order of 124 billion dollars, and the industry corporations pocketed profits of the order of 28 thousand 330 million dollars for these sales, 46.6% [about 9 thousand million dollars] more than Brazil, the largest economy in Latin America.13

The Economist affirms that it is not only the low costs ("Mexico offers savings of 14.1% compared to the United States") but other competitive advantages that it offers to the "food industries", such as "the network of trade agreements, which allows these companies access large markets such as Europe and the United States with tariff preferences ”, 14 which makes Mexico a kind of refuge for processing companies, a refuge where despite the global economic crisis“ sales of retail establishments have grown steadily in the last three years. ”15 So far Mexico has signed 12 free trade agreements with 44 nations, 28 bilateral investment agreements and 9 economic cooperation agreements.16

A symbolic tax

In 2014, the Mexican government, under pressure to deal with the growing health crisis, enacted a law to levy an 8% tax on all high-calorie packaged foods, including peanut butter and peanut butter. sweetened cereals for breakfast. It also approved a special tax of one peso (about 8 cents until before the most recent devaluation) per liter of bottled soft drinks.17 The government disclosed its actions as a tough measure to curb sales of junk food. But without complementary actions that encourage healthy alternative options to the processed foods that have flooded the Mexican market and poorer neighborhoods in particular, the tax appears only as a way to take its share of the lucrative junk food trade than the government's own measures. government have facilitated. The only difference is that Mexican consumers now pay more for the foods that are killing them.

Right after the tax in question was enacted, PepsiCo, one of the country's leading junk food producers, an investment of $ 5 billion in its Mexican operations, while Nestlé confirmed a $ 1 billion investment. .18 Contrary to what one would expect, the investment does not apply only to advertising or marketing but to innovation, brand building, infrastructure, and new links with agriculture, public relations and “projects” with the communities.

The domain of the point of sale

One of the reasons that large food corporations are so confident in their ability to increase their sales, despite the new tax, is the high level of control they exercise over the distribution of their products. This, says Corinna Hawkes, was the “second effect” of NAFTA on the Mexican food system20: an explosive growth of supermarket chains, discount stores and convenience stores, “from less than 700 to 3,850 in 1997 alone, and 5,729 in 2004 ”.21 The success of Wal-Mart in the country - today“ the nation's leading retail chain ”- and of other supermarkets, is only surpassed by the growth of“ convenience store chains ”(Selling“ a limited number of convenience items and products 24 hours a day ”).

In these new trends in retail distribution, the huge supermarkets are, of course, important because they concentrate goods, but the central objective is to replace the corner stores (“las tienditas”), aggressively taking over previously independent commercial territories.

Street food stall. (Drawing: Rini Templeton)

Food corporations began by colonizing existing, dominant, food distribution networks of small-scale vendors, known as shops, sundries, stalls. Shops on the corner, in the neighborhoods. There are still 400 thousand of these points of sale in Mexico: places smaller than 10 square meters, which sell a limited variety of products and whose refrigeration equipment and inventory is limited.22

“The stores were crucial to the spread of junk food; they are the means by which transnational and national food companies sell and promote their products to the poorest populations in small towns and communities, "said Corinna Hawkes in 2006." More than 90% of all Coca-Cola and PepsiCo sales [in the early 2000s] it came from the stores. ”23

Corporations flooded store distribution channels with products that boosted consumption and lowered transportation costs (tying deliveries of various items produced by the same company to each of the selected destinations).

PepsiCo, for example, not only distributes its soft drinks to stores but also multiple variants of its Sabritas potato chips and other related snacks, as well as its line of Sonric’s candy. Each product is hugely sold for what the industry calls "absolute control of the point of sale." So, availability became the crucial factor in purchasing and consumption. People will consume what they find on hand, and the items available are overwhelmingly just processed foods.

We must understand that stores, but even more convenience stores, not only sell what is accepted as junk food. Those sites sell a not-so-vast variety of processed, packaged, bottled, canned foods, making some specific processed grocery items the only thing available.

Stores are losing ground to corporate retailers who offer processing companies much more opportunities to sell and win.

By 2012, retail chains had displaced stores as the main source of grocery sales, with 35% of the national market, while stores maintained 30% and street markets 25% .24 According to the Mexican Chamber of Commerce, they close five stores for every convenience store that opens.25

For example, Oxxo (owned by Femsa, the Coca-Cola subsidiary) tripled its stores to 3,500 between 1999 and 2004.26 In July 2012, Oxxo was opening its 10,000th store, and is looking to open its 14,000th store at some point of 2015.

Oxxo (owned by Femsa, a Coca-Cola subsidiary) opens an average of 3 stores a day - and will it open? his 14 thousand store in Mexico this 2015.

This means opening about a thousand stores a year, an average of 3 stores a day.27 Oxxo was receiving 19 billion pesos (more than one billion dollars) during the first quarter of 2012.28 During the third quarter of 2014, Oxxo received 72 thousand 400 million pesos (more than 5 billion dollars), 13.2% more than a year before.29

Oxxo's sales growth was ten times higher than that of Soriana, the second largest supermarket chain in Mexico.30 During 2014 Oxxo surpassed Soriana in retail sales, and was placed as the second largest retailer in the country, leaving the stores, and the families who run them, literally in the dust.31 Now, Soriana has taken over one of the largest supermarket chains in the country, Comercial Mexicana, and experts say that Soriana will regain second place in retail, behind Wal-Mart. 32

Sweet remedy for hunger?

Food processing companies, a crucial factor in the health emergency that Mexico is experiencing, spend enormous sums of money on public relations to mask the enormous problems that their food and their advertising campaigns generate. Throughout Mexico, ads associate their corporations with family values, sustainability, charity, good health, and quality jobs.33 Companies are very interested in being associated in government campaigns, and the strange thing is that governments in Mexico also seek their participation .

In April 2013, the Ministry of Social Development (Sedesol), signed some agreements with PepsiCo and Nestlé to involve them in the National Crusade against Hunger, promoted by the government.34 With this agreement, Sedesol commits to “support with federal subsidies the execution of the projects in the selected priority areas ”, while the corporations say that together with the government they seek to contribute“ to guarantee food security and to make it possible through nutritional products to the population living in poverty and extreme poverty ”.

PepsiCo is committed to developing two fortified oat-based products from its Quaker brand, and to building a Global Center for Baking and Nutrition Innovation in Monterrey, Mexico.35

Nestlé promised a new coffee processing plant in Guerrero and the expansion of several projects, including one focused on "women entrepreneurs" called My Sweet Business, which the company is already developing in Venezuela and Bolivia. With the project, Nestlé plans to train 1,500 women to make sweet but "nutritious" desserts containing Nestlé products, as well as giving these women the necessary tools so that they, in turn, train another ten women each. In total, a “small army” of 15,000 Mexican women would be mobilized to mobilize in “priority zones” throughout the country promoting the Nestlé way of nurturing children with the support of funding from the Ministry of Social Development.

Support the rich, compensate the poor

Mexico is a country where 78.5 million people suffer from some degree of food insecurity from mild to severe.

In addition, about 48.5 million Mexican adults are obese or overweight —7 out of 10 adults — and 22 million adults are obese.

"These people will be ill an average of 18.5 years during their lifetime." And the problem increases at all income levels, although the fastest increase occurs among the poorest 20 %.36

The consequences are considerable — rising rates of type 2 diabetes, cardiovascular disease, and different forms of cancer.

The Crusade Against Hunger in Mexico will not solve the problem. No campaign against hunger will be effective with just a few pilot demonstration projects spread over a territory as large as Mexico. The Crusade Against Hunger targets only 7.8 million people —10 times less than the number of Mexicans suffering from food security.37 The areas classified as priority by the project are not even the areas of extreme poverty or hunger according to the definition of the National Council for the Evaluation of Social Development Policy (Coneval) .38

It requires a much more complex and radical approach than the government's proposed sweet tax and hunger crusade. It is necessary to go against the empire of processed foods, whose tentacles now reach the entire urban space and advance and disperse throughout the rural area.

The terrible truth is that "between 1999 and 2006, the consumption of sweetened beverages doubled and that today, 10% of the total energy intake of Mexicans comes from these beverages." And it is crucial that they get that energy. Taxing soft drinks is just a "soft policy instrument," says former Special Rapporteur for the Right to Food, Olivier De Schutter, because "it locates the problem of overweight and obesity in consumer behavior, when in fact the problem arises from the total food system ”.39

According to De Schutter, for a program to effectively tackle hunger and malnutrition, it has to focus on the peasantry and small-scale farmers. They make up a substantial percentage of Mexico's poor, and they are the ones that best supply rural and urban populations with nutritious food.40

But in Mexico, “most agricultural programs do not target the poor: taken globally, public expenditures on agriculture are very regressive […] Although more than 95% of expenditures on social programs of the Mexican government under its Special Program Concurrent for Sustainable Development (PES) target the poor, less than 8% of spending on agricultural programs is directed to this poor population. The Rapporteur insists: “Recent studies indicated that agricultural policies favor the states, municipalities and the richest producers or establishments. In 2005, the six poorest states received only 7% of public spending on agriculture, despite the fact that these entities are home to 55% of the extremely poor ”.

De Schutter concludes: “In a country where 80% of the peasants have less than 5 hectares, it would be desirable to allocate more resources to support small farmers in depressed areas, since the ongoing programs do not respond effectively to rural poverty. ”.41

After hearing hundreds of testimonies across the country, the international jury of the Permanent Peoples' Court, which handed down a judgment in November 2013 in the case related to food sovereignty, reached a similar conclusion.

Mexico could achieve self-sufficiency in a short time, if peasant agriculture were supported with amounts similar to those granted to entrepreneurial agriculture. One of the conditions for this would be to reconstitute the instruments to support the countryside disabled by NAFTA. The loss of food sovereignty that this policy has caused has as one of its main components an induced modification of the Mexican diet with catastrophic effects.

Mexico suffers from one of the highest rates of obesity, diabetes and hypertension in the world. It ranks first in the world in the consumption of cola drinks per person and one of the first in the consumption of so-called “junk food”. At the same time, the consumption of corn products has started to decline for the first time in history.

While Via Campesina argues that the first component of food sovereignty is the autonomous production of food and that the people themselves define what they eat, in Mexico there has been a costly campaign [the Crusade against Hunger], through an complicit alliance of governments, corporations and the media, to promote consumption habits that under the cover of modernization have been systematically destroying the food preferences of Mexican men and women.42

To face the food and health crisis, Mexico requires nothing less than a total reformulation of Mexico's disastrous trade and investment policies and full support for peasants and small-scale producers.

Video: Junk Food Taking Over NAFTA Negotiations (June 2021).