Impact on retail establishments "Supermarkets and Minimarkets" from the Tax on ultra-processed foods in Colombia

Abstract

In Colombia, the tax on ultra-processed foods was incorporated by Law 2277 of 2022 as a fiscal policy aimed at public health, with the purpose of discouraging the consumption of products high in sugar, sodium, and saturated fats. Since its entry into force in November 2023, it has generated significant changes in food products, and consequently in consumer behavior, as well as in the development of business strategies in the food sector, on the other hand, during the period from January-November 2024, the collection from this tax reached $2.2 billion, of which 86% came from ultra-processed foods according to the Center for Economic Studies of Colombia -ANIF. This research seeks to analyze the impact on the implementation of the tax measure on the commercial development of "Supermarkets and minimarkets", based on the perception of these organizations located in the province of Sumapaz, department of Cundinamarca, considering the effects on consumption, sales of products and the adaptation of the productive sector. The research adopts a descriptive and analytical approach, based on documentary review of regulatory, economic and financial information, as well as on the analysis of business reports and rigorous work in the interaction with a target group that verifies the behavior of end consumers on a daily basis. The results show an increase in the prices of taxed products and a moderate reduction in their consumption. However, companies in the sector in Colombia have managed to mitigate the impact through reformulation strategies among the main ones. It is clear that the contributory measure has generated a moderate impact on the national market, in turn promoting economic contributions to public health policy without generating significant structural effects on business sustainability, although challenges persist in terms of equity and effectiveness of responsible consumption.