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Small Retailers Plan November Protests as Mexico Sets 2026 Tax Hikes on Sugary Drinks and Cigarettes

Merchant groups warn the higher IEPS will push customers toward informal and illicit markets, putting neighborhood stores at risk.

Overview

  • The revised IEPS is approved to take effect on January 1, 2026, lifting the levy on sugary beverages from 1.6451 to 3.0818 pesos per liter, adding 1.5 pesos per liter to light or zero‑calorie drinks, and phasing the cigarette tax up to 200% over five years.
  • Retailer associations project a 10–15% drop in monthly sales for many corner stores and say hundreds of thousands of microbusinesses could be strained, with some groups citing exposure for roughly 200,000 shops and claims of up to 1.2 million outlets affected.
  • Organizations representing small merchants announced mobilizations starting in November in Mexico City and other locations to press for changes to the fiscal package.
  • Stakeholders cite National Institute of Public Health data showing illicit cigarette consumption rose from 8.5% to 20.4% between 2017 and 2023 and argue higher legal prices will expand contraband and informal sales, with some leaders reporting coercion by criminal groups in northern states.
  • The federal government promotes the measure as a public‑health policy to curb chronic disease and bolster health funding, while merchant groups call it primarily revenue driven and urge alternatives such as education and health investment.