Corporate political activity of the soft drink industry in Australia

The soft drink manufacturing industry in Australia is highly concentrated with its two largest players, Coca-Cola Europacific Partners Australia (51.7%) and Asahi Holdings (30.7%) accounting for more than four-fifths (82.4%) of the industry’s total revenue in 2024-25.¹ Under industry classifications used by the Australian Bureau of Statistics², the industry includes the production of canned or bottled soft drinks, sports drinks and energy drinks (but excludes bottled water, fruit juice drinks and fruit drinks). Total revenue across the industry in 2024-25 was projected to be $3.9 billion, with an annual growth rate of 0.4% expected between 2025 and 2030.

Coca-Cola Europacific Partners Australia is a private company that is a wholly owned subsidiary of United Kingdom-based Coca-Cola Europacific Partners. The Coca-Cola Company, based in the United States, owns a large but minority share of Coca-Cola Europacific Partners. Coca-Cola Europacific Partners Australia has exclusive bottling rights to a range of The Coca-Cola Company’s beverage brands in Australia and a number of neighbouring territories.¹ Coca-Cola Europacific Partners Australia purchases beverage bases from The Coca-Cola Company and coverts them into soft drinks through domestic processing.

Asahi Holdings (Australia) is a private company that is a wholly-owned subsidiary of the Japan-based Asahi Group Holdings Limited.¹ It has exclusive bottling rights to the Pepsi and Schweppes brands in Australia and operates under a similar business model to Coca-Cola Europacific Partners Australia. Its brands also include Sunkist, Solo, the Real Iced Tea Co, Gatorade, and Cottee’s.

Despite their substantial revenue, according to industry analysts, the Australian soft drink manufacturing industry has faced ‘challenging conditions’ in recent times.¹ Growing health consciousness has curbed demand for the industry’s most lucrative product, high-sugar carbonated soft drinks. This has been offset somewhat, however, by growing popularity of higher value sports and energy drinks, and an increasing focus on diet and low- and no-sugar soft drink ranges.

The Australian soft drink industry perceives the prospect of a tax on sugary drinks as a potential threat. According to the World Health Organization, taxes on sugary drinks are a ‘powerful tool to promote health because they save lives and prevent disease, while mobilising revenue for countries that could be used to realise universal health care coverage’.³ Many other authoritative public health bodies are in accordance, including the Australian Medical Association,⁴ the Public Health Association of Australia,⁵ the World Cancer Research Fund,⁶ the United Nations Children’s Fund,⁷ and the World Obesity Federation.⁸ 117 countries and territories have implemented taxes on sugary drinks to date, with a Senate Committee in 2018 and a Parliamentary Inquiry in 2024 calling for Australia to join the ranks.^{9 10}

The Australian soft drink industry has played a key role in blocking the implementation of a tax on sugary drinks in Australia. Research has shown that, for years, the industry has funnelled large sums of money into political party donations and lobbying key policymakers.¹¹ In 2016, the president of the industry’s peak body, the Australian Beverages Council, even went as far as celebrating the Council’s success at warding off the ‘threat of a discriminatory tax on our products’, noting that during the 2016 Federal Election it had devoted ‘significant resources to keeping a tax off the policy table of either the government or opposition, through direct engagement with key politicians’.¹²

As part of an industry-wide campaign against a tax on sugary drinks, the Australian Beverages Council has used a ‘policy substitution’ strategy by making a voluntary pledge to reduce sugar across the industry.¹³ Policy substitution is recognised as a key strategy used by industry to influence government policies, and often involves voluntary initiatives used as alternatives to regulation. In June 2018, then-Health Minister Greg Hunt endorsed the industry pledge and stood alongside then-Australian Beverages Council chief executive Geoff Parker when it was announced at Parliament House in Canberra.¹⁴ In 2022, the Australian Beverages Council announced the next phase of the voluntary pledge, reporting that the industry’s largest companies had committed to accelerate sugar reduction to 25% across their portfolios by 2025.¹⁵

Many health groups have been sceptical about the Australian Beverages Council’s voluntary sugar reduction pledge from the outset, pointing out that individual products would not necessarily contain less sugar and that much of the reduction would flow from consumers switching to low-sugar alternatives.¹⁶ These concerns were amplified in 2024, when it was revealed that Coca-Cola had substantially increased the sugar content in its popular drinks Fanta and Sprite just a few years after reducing it.¹⁷ When contacted by Guardian Australia, a Coca-Cola Australia spokesperson commented that ‘we are proud of the progress we have made to date around reducing sugar within our portfolio but know there is more work to do’.¹⁷

In contrast to what has been observed in Australia, evidence has shown that the UK soft drinks industry has substantially reduced the sugar content of a number of popular products since the announcement of the UK Soft Drinks Industry Levy in 2016.¹⁸ Analyses have indicated that such sugar reductions have been made so that particular drinks have sugar content that falls below the level that attracts a levy.^{19 20} This evidence indicates the effectiveness of mandatory, rather than voluntary, approaches to sugar reduction.

Globally, the food industry actively funds research that seeks to diminish their role in unhealthy diets. As a prominent example of this approach, Coca-Cola has attracted criticism for funding research that shifts the blame for obesity away from diet towards inadequate physical activity. In 2015, the New York Times reported that Coca-Cola had provided $1.5 million to two US universities to establish the Global Energy Balance Network, a not-for-profit organisation led by a number of influential scientists.²¹ The network’s objective was to ‘reframe obesity’ as a problem of energy imbalance that could be addressed with more physical activity rather than improving poor diets.²²

In its proposal to establish the network, Coca-Cola said the science of energy balance could be deployed as a weapon ‘in the growing war between the public health community and private industry’ over obesity.²² The message is misleading as evidence shows that increased kilojoule intake is the driving force behind rising obesity rates.²³ Professor Marion Nestle said the network was a front group for Coca-Cola. ‘Coca-Cola’s agenda here is very clear: Get these researchers to confuse the science and deflect attention from dietary intake,’ she said.²¹ A review of academic papers investigating the association between consumption of sugar-sweetened beverages and weight gain or obesity found those funded by the food industry were five times more likely to find there was no association, compared to papers without food industry funding.²⁴

Coca-Cola has spent millions of dollars funding academics and research groups in Australia over the last decade or so.^{25 26} In 2011, Coca-Cola provided funding to establish an Australian arm of its program Exercise is Medicine,²⁷ which the company described as ‘a global partnership dedicated to encouraging doctors and health care providers to prescribe exercise as medical treatment’.²⁸ The Coca-Cola Company founded the initiative in 2007 through a partnership with the American College of Sports Medicine. By January 2015, it was running in 43 countries and had trained more than 15,000 health professionals.²⁹ In Australia, the Exercise is Medicine program was established as a partnership between Coca-Cola South Pacific and the professional body Exercise and Sports Science Australia.²⁷ It was launched at the General Practitioner Conference and Exhibition in Sydney with a presentation by Dr Steven Blair, one of three US academics who established the Global Balance Energy Network.²¹ In a YouTube video promoting the network, Dr Blair claimed there was ‘virtually no compelling evidence’ that fast food and sugary drinks cause obesity.³⁰ The Australian arm of the Exercise is Medicine program continues to be managed by Exercise and Sports Science Australia.³¹