Trade and investment liberalization, food systems change and highly processed food consumption: a natural experiment contrasting the soft-drink markets of Peru and Bolivia.

Phillip Baker,Ron Labonte,Sharon Friel,Ashley Schram

doi:10.1186/s12992-016-0161-0

Phillip Baker, Ron Labonte + Show 2 more

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https://doi.org/10.1186/s12992-016-0161-0

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Abstract

BackgroundFree trade agreements (FTAs) can affect food environments and non-communicable disease risks through altering the availability of highly-processed foods. Few studies have quantified such effects. Using a natural experiment this paper quantifies changes in Peru’s soft-drink market before/after entry into the US-Peru FTA, compared with Bolivia, a county with no such agreement.MethodsDifference-in-difference models were used to test for between country differences in the rate of per capita foreign direct investment (FDI) inflows, soft-drink imports, the volumes of various soft-drinks sold, and the volumes of sugar from soft-drinks before/after FTA ratification (2006) and enforcement (2009).ResultsIn Peru average per capita FDI-inflows rose from US$103.11 in the pre-ratification period to US$269.79 post-ratification, with little change in Bolivia. This corresponded with a 122 % increase in Peruvian soft-drink production. There was a significant between-country difference in FDI-inflows pre-/post-ratification (DID:1.07, 95 % CI:0.19–1.96; p = 0.01). Despite little difference in total per capita soft-drink sales volumes there was a significant between-country difference in per capita sugar from soft-drinks pre-/post enforcement (DID:-0.99, 95 % CI: −1.91–0.06; p = 0.03) with stagnated growth in Peru and continued growth in Bolivia. This resulted from stagnated sugar sweetened carbonates growth and increased bottled water, juice and sports & energy drinks growth in Peru, with continued carbonates growth in Bolivia. There was a significant between-country difference in per capita carbonates (DID: −1.44, 95 % CI: −2.52–0.36, p = 0.01) and bottled water (DID:0.63; 95 % CI: −0.01–1.26; p = 0.04) sales volumes.ConclusionsThe FTA may have resulted in increased FDI-inflows and soft-drink production and also contributed to the diversification of soft drinks produced and sold in Peru with some positive (stagnated carbonates and increased bottled water) and some negative (increased juice and sports & energy drinks) implications for nutrition. These changes were not evident in Bolivia. These results should be interpreted cautiously given the study design limitations.

Highlights

Free trade agreements (FTAs) can affect food environments and non-communicable disease risks through altering the availability of highly-processed foods
Comparing changes in foreign direct investment (FDI)-inflows and soft-drink production The first hypothesis was that reduced barriers to investment would result in a significant change in FDI-inflows into Peru following the FTA and a corresponding change in soft-drink production
The difference in FDI-inflows pre-/post-ratification (DID) model, with an intervention time-point of 2006, revealed a significant between-country difference in loge FDI-inflows per capita (1.07, 95 % CI: 0.19– 1.96; p = 0.013)

Summary

Introduction

Free trade agreements (FTAs) can affect food environments and non-communicable disease risks through altering the availability of highly-processed foods. Since the 1980’s the proliferation of free trade agreements (FTAs) has globalized markets in highly-processed foods Because such foods (e.g. biscuits, confectionary, savoury snacks and sugar sweetened beverages), tend to be high in glycaemic load, fat and salt and because their consumption is rapidly increasing in low- and middleincome countries (LMICs), they are implicated in the rising burden of diet-related non-communicable diseases (NCDs) globally [1, 2]. The sector is highly concentrated at the global level with two US firms, Coca-Cola and PepsiCo, together controlling 35.7 and 71.7 % (by value) of the soft-drink and carbonated soft-drink markets respectively in 2014 [7] Through their considerable market power, including a combined $7.27 billion global advertising expenditure in 2013 [8], these firms can shape global and local food systems in ways that alter the availability, affordability and desirability of soft-drinks and thereby shape population level consumption patterns [9,10,11,12]

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