Healthy eating becomes a luxury in emerging markets

Healthy eating is becoming an expensive luxury in emerging markets, and taxing junk food and sugar-laden sodas, as Mexico has done, may be the answer.

That is the conclusion of a new study by the UK Overseas Development Institute, which tracked food prices in China, Brazil, South Korea and Mexico from 1990 to 2012.

It found the cost of fruit and vegetables rose as much as 91 per cent, above consumer price inflation, while the price of some processed foods such as ready meals fell a fifth in real terms.

That is bad news for countries struggling with rising obesity rates, as emerging markets increasingly are, because research has shown that higher prices for junk food successfully deter consumption, the report said.

In short, emerging markets are following the unhealthy eating trends of the UK and the US - the price of an ice-cream halved in the UK between 1980 and 2012, for example, while that of fresh green vegetables tripled.

To put that into perspective, Brazilians are eating the equivalent of an extra 140 Big Macs each a year in ultra-processed, ready-to-eat foods, notes Steve Wiggins, the report's lead author.

In Korea, the price of cabbage - the main ingredient for national staple kimchi - soared 60 per cent between 1975 and 2013 based on indexed prices, while in China, the cost of fresh green vegetables has doubled in the past two decades.

This chart from the report, the first of its kind to cover emerging markets, spells out the issue starkly.

"Two things are readily apparent. One is that prices of fruit and vegetables have risen substantially since 1990, mainly by 2 per cent and 3 per cent a year on average, or by 55-91 per cent between 1990 and 2012," the report noted.

"The other is that four of the six processed products for which estimates are significant show price falls since 1990. Most of the other foods have seen their prices rise by 1-2 per cent a year, with the exceptions of the price falls seen for rice in Korea and chicken in Mexico," it added.

Why might that be? Mr Wiggins noted that fruit and vegetables often had more "added value" on supermarket shelves these days, meaning they are pre-washed or bagged, for example, which jacks up the price. He also noted that what may once have been seasonal is now often available all year round, another price booster.

Mexico - Latin America's No 2 economy, which has seen the cost of its staples, maize flour and tortillas, rise in 2014 to almost twice their level in the early 1980s, and where seven out of 10 adults and a third of children are obese or overweight - blazed a trail by introducing a tax on sugary drinks and high caloric food at the start of 2014.

"It's important not to claim that all you need to do to change diets is to change prices and everything will sort itself out through the market," Mr Wiggins told the Financial Times.

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One British study cited in the report suggested that if revenue from a 17.5 per cent sales tax on unhealthy foods were used to subsidise fruit and vegetables, about 6,400 premature deaths a year from heart disease and cancer could be averted. That, for comparison, is more than three times the number of people who die in road accidents in the UK each year.

Mr Wiggins said Mexico's junk food tax could provide "valuable lessons for other developing and emerging economies" but notes that "Stalinist measures" may not be needed to get people to smarten up their eating habits.

He cited a 2011 US study that suggested that blue-collar workers in the US had become 10lbs heavier on average every decade over 40 years, and that the cause could be an excess of just 100 kilocalories a day.

"It's too little exercise and too much food - but that translates into about half a sandwich and 15 to 20 minutes of walking," he said. "You'd like to think that's not the most tremendous challenge."

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