Sin Tax in Food and Beverages - Strategies, Outcomes and Learnings

2017 and 2018 will see further implementation of food and drink sin taxes

Out of 19 countries that currently implement sin taxes on food or drinks, 13 had only introduced them in the past decade; however an increasing number of countries are committed to do the same in the next 1-2 years. Along with the recent WHO recommendation on sugar tax, all planned food/drink sin taxes will target sugary soft drinks with the aim of reducing sugar consumption by up to 20%.

Soft drinks taxes are an effective revenue generator

Among EU countries, soft drinks tax revenue ranged from €89 million to €312 million a year on average. Taxation of soft drinks sweetened with sugar and, as well as, those with high intensity sweeteners is weaker at reducing consumption, but generates higher revenue per capita.

Sin taxes are not effective at reducing consumption of taxed items in the long term

Further insight into sin taxes in eight countries showed that in the majority of cases the tax only induced a temporary dip in sales of the taxed items. Preliminary findings show that the higher the tax, the longer its effect on sales.

100% juice consistently omitted from tax legislation

Despite growing recommendations from public health bodies to include 100% fruit juice in soft drinks taxation, only one country is considering this in its future legislation. According to Euromonitor’s Passport Nutrition data, if 100% juice was taxed in the same way as sugary soft drinks in the UK, this would generate some £267 million a year in tax revenue.

29 countries that currently do not have a sugar tax in place significantly exceed their sugar intake

One in five of the researched countries by Passport Nutrition consume more than 40% of daily calories from fat, and an astonishing 63% of researched countries consume more that 20% of their daily calories from total sugar. These could be the best potential targets for the next sugar and fat taxes.