Countries that have taxes on sugar-sweetened beverages (SSBs)

With many countries introducing a sugar-sweetened beverage (SSB) tax over the past decade, research is now showing the benefits of these taxes. High quality studies, particularly from Mexico, UK and South Africa have shown that these taxes have reduced consumption of SSBs and led to reformulation of products to reduce sugar levels. Most of the current data looks at impacts from a time period of up to three years after introduction of the tax. Longer term studies will measure the effects of SSB taxes on obesity.

Impact of SSB taxes: international case studies

Mexico

Mexico introduced a volumetric SSB tax in 2014 – a tax of 1 peso per litre on SSBs. This tax has led to a price rise of about 11% for soft drinks, and a slightly smaller increase for other sweetened beverages.¹ This price increase has reduced both purchases and consumption of SSBs in Mexico. Studies of the effects of the Mexican SSB tax on obesity in Mexico are ongoing. Below is a summary of the major results to date.

1. Reduction in the volume of SSBs purchased after the new tax started. By 2016, there was a 37% reduction in the total volume of SSBs purchased, compared to the year before the tax.²
2. Reductions in SSB purchases were greatest among poorer households and those that previously purchased high amounts of SSBs.¹³
3. It’s predicted that over 10 years, the Mexican SSB tax would prevent 239,900 cases of obesity. Of these, 39% would be cases of obesity prevented in children. This drop in obesity is predicted to avoid 5,840 disability-adjusted life-years.⁴
4. The tax was also predicted to be highly cost effective. By saving costs such as health care, the tax would save almost $4 per dollar spent on its implementation.⁴

United Kingdom

An SSB tax, called the Soft Drinks Industry Levy, was introduced in the United Kingdom in April 2018. The UK tax is a two-tiered levy that taxes producers according to a drink’s sugar concentration, with different rates for different sugar levels. Drinks containing more than 8 g of sugar per 100 mL are taxed at £0.24 per litre and those containing 5 to 8 g per mL of sugar are taxed at £0.18 per litre.⁵ Manufacturers responded to the UK tax by widespread reformulation of their products to reduce sugar levels. Where sugar levels remained above the taxation threshold, prices were not always raised to reflect the taxed amount. The tax was only passed on to consumers for drinks with more than 8 g sugar/100mL, which underwent an average price increase of £0.075 per litre.⁶

The success of the UK tax in reducing sugar consumption has been demonstrated by high quality research, with major findings summarised below:

1. The UK tax led to widespread reformulation to reduce sugar levels in SSBs. The reduction in sugar from this reformulation was the equivalent of removing a total of 45 million kg of sugar from soft drinks each year.⁷⁸ More information on reformulation is available from Reformulation of food products to reduce sugar consumption.
2. The proportion of drinks available in supermarkets with high sugar content dropped after the new tax. Between 2015 and 2019, the percentage of drinks in supermarkets with sugar content of more than 5 g per 100 mL fell from 49% to 15%.⁶
3. The amount of sugar in SSBs was reduced after the UK tax was introduced. There was a 43.7% reduction in the sugar content in the drinks subject to the tax by four years after the tax was introduced.⁹
4. There was a 35.4% reduction in consumed sugar from taxed drinks. This reduction was largest (38.5%) in the households where the main wage earner was in a skilled manual occupation.⁹
5. The majority of fruit juices, juice drinks and smoothies targeted at children and in children's lunch boxes were not eligible for the UK tax. Most of these drinks did not meet the eligibility requirements for the UK tax, usually because they were made with fruit juice or pureed fruit without other added sugar, despite having over 5 g per 100ml sugar. Researchers recommend adapting the UK tax to include drinks targeted to school children as many remained above the recommended amount of sugar for the age group but this was not done.¹⁰

South Africa

In 2018 South Africa introduced a 10% tax, called the Health Promotion Levy, on sugary drinks, excluding fruit juices. This is a tax of 0.021 ZAR per gram of sugar, in drinks with over 4 g of sugar per 100 mL.¹¹ Carbonated drinks increased in price by an average of 1.006 ZAR per L after the introduction of the new tax, but the prices of non-carbonated drinks that were subject to the tax did not increase. The price increase for carbonated drinks occurred for both low and high sugar beverages.¹²

The success of the South African Health Promotion Levy has been described by a number of studies:

1. Less carbonated drinks were purchased in urban areas. Purchases of carbonated drinks by households fell by an average of 29% after the tax was introduced. The amount of sugar purchased in these drinks fell by 51%.¹² This came about due to both behaviour change and reformulation.¹¹¹³
2. People in lower socioeconomic groups purchased considerably less sugar in drinks that were subject to the tax. There was a 57% drop in the grams of sugar purchased in taxed drinks by people in urban lower socioeconomic urban households.¹¹¹⁴ In addition to reformulation, the total volume of taxed drinks purchased was reduced, indicating a behaviour change.¹⁴

SSB taxes in other countries

Research on the effects of SSB taxes is continuing in numerous other countries, with some highlights presented below:¹⁵

Portugal: A two-tiered SSB tax was introduced in Portugal in 2017 of €0.8/L and €0.16/L increases in average prices for drinks with sugar contents of <80 g/L and ≥80 g/L. Close to 100% of the tax was passed through to consumers.¹⁶ A 7% reduction in sales of SSBs was reported in the first year, with reformulation leading to an 11% reduction of total energy intake through consumption of SSBs.¹⁷

Chile: Until 2013, Chile had a 13% tax on non-alcoholic drinks. In 2014, this tax was raised from 13% to 18%, only for soft drinks with at least 6.25 g of sugar per 100 mL, and the tax was decreased from 13% to 10% for soft drinks with less than this threshold of sugar.¹⁸ The prices of high sugar soft drinks increased by an average of 1.9% and decreased by 1.7% for the low sugar soft drinks.¹⁸ After one year, there was a 22% reduction in the volume of higher-taxed drinks sold, but no change in the overall purchase of soft drinks. This indicates that some consumers switched their preferences towards drinks with lower sugar content.¹⁸

US regional and city-based taxes: SSB taxes have been introduced in specific regions and cities in the United States.¹⁵

• A 1 cent per fluid ounce SSB tax was introduced in Berkeley, California in 2015 that resulted in an average price increase of 0.83 cents per fluid ounce.¹⁹ One year after introduction of the tax, there was a 21% decrease in consumption of SSBs.¹⁵¹⁹ Reductions in SSB consumption were maintained for at least three years and detected in demographically diverse neighbourhoods.²⁰
• A 1.5 cents per ounce tax on SSBs (including diet soft drinks but excluding fruit juices and milk drinks) was introduced in the city of Philadelphia in 2017. The tax was fully passed on to consumers, leading to a price increase of 21% for the taxed drinks.²¹ There was an average reduction of 8.5 ounces (251ml) of taxed beverages purchased per shopping trip in Philadelphia after the tax. Adults in Philadelphia reduced their consumption of sugars in from SSBs by an average of 6 g per day but unfortunately the effect was not seen in children.²¹ There was also reduced availability of SSBs in stores after the tax, as stores decreased their stocks of taxed drinks and increased their stocks of water.²²

List of countries with an SSB tax

The 54 countries that have an SSB tax are listed below, with details including the implementation date and type of tax used. Some countries have adopted a tiered tax design, which applies different tax rates depending on sugar content.

The table below uses the following definitions:

• Type of tax
  • Excise tax – a tax levied on a particular product at point of manufacture. An excise tax can be either:
    • Specific – based on quantity (e.g. volume or sugar content) OR
    • Ad valorem – calculated on a percentage of the wholesale or retail price²³
  • Value-added tax – a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to point of sale.

• Tax design
  • A specific excise tax can be calculated on either the volume of the drink (volumetric) or its sugar content.

• Tiers
  • A tiered excise tax applies different rates depending on sugar content – for example, the United Kingdom tax has different rates for drinks containing more than 8 g of sugar per 100 mL, and for drinks containing 5 to 8 g of sugar per 100 mL.

See How should an Australian tax on sugar-sweetened beverages be designed for more details.

In addition to the countries in the table, Micronesia, Palau, Papua New Guinea and the Solomon Islands have import tariffs for SSBs. However, these tariffs are the same rate as for water, so were not included in the table.²⁵

In the USA, regions and cities have implemented taxes on SSBs.²⁶²⁷ In California, these are San Francisco, Berkeley, Oakland and Albany (all at 1 cent per ounce). Cook County, Illinois, has a 1 cent per ounce tax. Philadelphia, Pennsylvania, has a 1.5 cents per ounce excise. Seattle, Washington, has a 1.75 cents per ounce distribution tax. Boulder, Colorado, has 2 cents per ounce excise. The Navajo Nation has a 2% junk food tax that includes SSBs.