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| Pan dulce, sweet breads or rolls, for sale in a panadería, bread shop. Photo: María Meléndrez Parada |
La Jornada: Susana González G.
Translated by Penn Tomassetti
The 15 percent drop recorded in this year’s sale of pan dulce [sweet breads or rolls], as a consequence of the tax reform, has resulted practically in “taking bread from the mouths” of those with the lowest income, warned Jonás Murillo González, director of the National Chamber of the Bread Industry (CANAINPA, in its Spanish initials).
The 15 percent drop recorded in this year’s sale of pan dulce [sweet breads or rolls], as a consequence of the tax reform, has resulted practically in “taking bread from the mouths” of those with the lowest income, warned Jonás Murillo González, director of the National Chamber of the Bread Industry (CANAINPA, in its Spanish initials).
MV Note: Pan dulce, sweet breads, are rolls in a wide variety of forms and flavors, which are a staple of Mexican breakfast. The tax, part of the tax reform passed earlier this year, is on foods and drinks with a high sugar content. It's intent was to reduce consumption of soft drinks and "junk food" with added sugar, as diabetes and obesity are major health problems in Mexico.
According to the organization, the average price of a bag of bread varies between 15 and 20 pesos [US $1.15 and $1.54], but the population in the bottom five deciles spends half of their income on food, and of that number, 25 percent is for bread and tortillas. Additionally, 75 percent of bakeries are located in economically depressed areas “where the population lives on less than five minimum wages,” [US$25 per day] the director said.
The special tax on production and services (IEPS, in its Spanish initials) approved in the tax reform has meant an added charge of 8 percent on the total value of sweet bread, which has affected its consumption in a severe way.
The special tax on production and services (IEPS, in its Spanish initials) approved in the tax reform has meant an added charge of 8 percent on the total value of sweet bread, which has affected its consumption in a severe way.
“We are talking about how the nutritional budget of that population will see itself severely affected in the next few years and definitely it will be affecting the industry,” the bakery manager said.He related how the consumption of bread in Mexico is already low, since each year they consume 33 kilograms [72.75 lbs] per person, while in Germany it is 110 kilos [242.5 lbs] and in Spain 88 kilos [194 lbs].
In addition to the drop in sales of the 45,000 affiliates of CANAINPA, the tax reform caused at least 5 percent of businesses across the country to close, mostly small shops that, after the application of the IEPS tax, began with layoffs and reduction of plant production until finally closing down completely.
The sector generates 500,000 direct employees, but with the IEPS tax on foods with high calorie content, he added, “the peddling of bread” on the streets is growing, as an employment option and low-cost consumption alternative.
The sector generates 500,000 direct employees, but with the IEPS tax on foods with high calorie content, he added, “the peddling of bread” on the streets is growing, as an employment option and low-cost consumption alternative.
“Informality [selling for cash on the street] in the bread business is what sets off worse salaries, lower standards of living, and greater health risks. Although it sounds a little absurd, at bottom, even though it doesn't cost more, buying very cheap bread can turn out to be much more expensive for you. Why? Because in the end, no one is paying taxes on that bread,” he specified. Spanish original