Taxes on sugary beverages and ultra-processed food: Noncommunicable disease and obesity prevention strategies

Sugary drinks tax and the war on obesity

The Global Food Research Program, University of North Carolina in the U.S. share their perspective on how taxes on sugary beverages are important components of noncommunicable disease (NCDs) and obesity prevention strategies

The global food research program has focused its energies on working with governments and research partners globally, especially in low-and middle-income countries, to develop large-scale regulatory and fiscal policies to attempt to prevent obesity and many diet-related NCDs.

  • Obesity and other nutrition-related noncommunicable diseases (NCDs), such as type 2 diabetes, hypertension, heart disease, and cancer, are the leading causes of death and disability worldwide. In 2015 more than 2.2 billion people, or one-third of the world’s population, were overweight or obese, and the prevalence is increasing rapidly.1-3
  • Consumption of sugary drinks is increasing globally.4, 5
  • Similarly, ultra-processed foods have become a major growth component in all countries and represent a huge threat to health and welfare6-8.

Consumption of Sugary Drinks Is a Major Cause of Obesity

  • Excessive sugar consumption is a major cause of obesity and its related diseases, increasing the risks of type 2 diabetes, hypertension, liver and kidney damage, heart disease, and some cancers.9-13 The guidelines of the World Health Organization and the World Cancer Research Fund state that added sugars should constitute no more than 10% of an individual’s total calorie intake and preferably less than 5%.9, 10
  • Sugary drinks often have no nutritional value and are particularly harmful to the body. The liver absorbs sugar in liquid form more quickly than in solid form and therefore cannot efficiently process and release it. The excess is stored in the liver as fat or glycogen deposits.14 This can lead to fatty liver disease and increased risks for diabetes and other NCDs. Consuming sugar in liquid form, be it from 100% fruit juice or from sugar-sweetened beverages, does not reduce food intake.
  • Sugary drinks contribute to undernutrition when they replace foods or drinks with greater micronutrient densities. For example, in some Asian, African, Latin American, and Caribbean countries many infants consume sugary drinks as weaning foods, which can worsen undernutrition and stunting.15-21 Infants with stunting face a much greater risk of high visceral fatness, hypertension, and type 2 diabetes.18, 22-26
  • It is hard to offset sugary beverage consumption with physical activity. For instance, to offset consumption of an 8-ounce (oz) (237-milliliter [ml]) regular soft drink requires 16 minutes of running or 1.0 mile of walking.27 To offset the normal intake of 20 oz (591 ml) requires 40 minutes of running or 2.5 miles of walking.

The Solution: Tax Sugary Drinks

  • Sugary drink taxes are win-win decisions for governments, because such taxes reduce sugary drink consumption while increasing revenues to fund other government services and initiatives.28 By 2020, over 45 countries and several smaller geographic units(cities, urban regions), tax sugar-sweetened beverages. (see map).
  • Sugary drink taxes increase public awareness of the harms of such drinks and incentivizes the food industry to reformulate products and market healthier beverages.29-31
  • In addition to the health-related economic and human costs of sugary drink consumption, the production of sugary drinks has important environmental consequences, particularly in water use and carbon emissions. The total water life cycle cost of the production of half a liter (500 ml or 17 oz) of a regular soft drink ranges from 168 liters of water for sugar beets to 309 liters for sugarcane.32-34 This water footprint includes caffeine and vanilla extract, which account for about 120 liters of water. In the United Kingdom the associated carbon emissions amount to about 0.26% of all of the country’s emissions, mainly from packaging (59.00–87.00%),35 refrigeration (33.00%), and transportation (7.00%).

Over 45 Countries or Smaller Jurisdictions Tax Sugary Drinks

Taxes on sugary drinks to tackle obesity

  • Prior to the introduction of its sugary drink tax in 2014, Mexico had the world’s highest intake of sugary drinks. Its modest tax, 1 peso per liter (around a 10% tax), has effectively reduced consumption and is hailed globally as a successful, positive public health policy.
  • After implementing the tax Mexico experienced a significant reduction in sugary drink purchases,36, 37 an increase in water purchases,36 and no change in total employment.38
  • Mexico’s tax most significantly reduced sugary drink consumption among lower-income and high-volume consumers, thus achieving health benefits among the 2 groups with the greatest health risks.39 During the tax’s first year sugary drink purchases among the poorest third of the population were reduced by 9%, compared to 6% on average.36 In the tax’s second year, contrary to food industry predictions, per capita sales and purchases of sugary drinks declined further.40 Mexican research shows that after implementation of the tax overall purchases of healthier beverages replaced those of sugary drinks.36 In the first year after implementation overall water purchases increased by about 4%.
  • A 10% reduction in sugary drink consumption among Mexican adults by 2022 from the 2013 level would result in 189,300 fewer cases of type 2 diabetes; 20,400 fewer strokes and heart attacks and 18,900 fewer deaths41
  • Sugary drink taxes in US cities have shown even larger impacts on purchases. The 10% tax in Berkeley was linked with significant declines after 1 year and a decline of almost 50% after 3 years.42-44 In Philadelphia, a large, lower-income city, a tax of approximately 15% reduced consumption by more than 38% in 1 year.45
  • The United Kingdom, Ireland, Saudi Arabia, the United Arab Emirates, India, South Africa, and many other countries and cities have passed taxes of 20% or higher as essential public health strategies.46-50
  • Excise taxes have worked for other unhealthy products. Taxes on unhealthy food products in Hungary and Denmark showed similar positive impacts in reducing purchases, as did a tax on nonessential food purchases in Mexico.51-53 Tobacco taxes have played a significant role in reducing tobacco use in jurisdictions around the globe.54

Ultra-processed foods and beverages increase significantly the risks of obesity, and other noncommunicable diseases, and most causes of mortality, while reduced consumption has significant effects on health and well-being.

  • Montiero has defined ultra-processed foods as multi-ingredient, industrially formulated mixtures that are hyper-palatable and contain excessive amounts of added sugar, added saturated fats and added sodium along with many additives.55, 56 They are usually manufactured to be ready-to-eat or ready-to-heat requiring no preparation before quick, easy consumption.57, 58
  • An increasing number of studies globally find these represent a huge growth component of food consumption in all countries8, 59-63.Case studies in various regions have found a rapid growth in Latin America and sub-Saharan Africa58, 64 Today there is not a town or village globally which does not have quick access to these unhealthy foods and beverages.
  • A sophisticated random controlled trial with a cross-over design run by the US National Institutes of Health showed that shifting from a real food diet toward an ultra-processed food one was linked with large and significant increases in body weight and all key biomarkers of major noncommunicable diseases65, 66.
  • Over 19 cohort studies that followed up adults and children for 10 years and more, showed a strong positive relation between ultra-processed foods and cardiovascular disease and all-cause mortality.67-70 A large number of studies published earlier reported longitudinal data from children and adults that associated ultra-processed food intake with increased NCD risk.7, 68-82
  • The rapid growth in sales of these foods in low- and middle-income countries greatly threatens to increase overweight/obesity and undernutrition, because infants are increasingly fed these products. In addition, studies are beginning to associate ultra-processed foods with reduced length-for-age.19 The A. M. Pries et al. 2019 study is the only one linking infant consumption of any ultra-processed food aside from infant formula, which fits into a different category but is also ultra-processed.19, 20, 83-86

Taxes on ultra-processed foods work

  • Studies from Mexico and Hungary highlight the potential for taxes on ultra-processed foods to be equally impactful as SSB taxes52, 87, 88. These taxes impact a much wider category of foods and beverages than just SSB taxes.
  • Reducing intake of ultra-processed foods is a major driver behind front-of-the-package warning labels which are a major threat to our health. The Chilean front-of-the package octagonal warning label helped to achieve significant reductions in SSB consumption in the world’s highest per capita consumer of SSB’s and be linked to major reformulation by the food industry89, 90alThis approach reduces not only added sugar consumption but also foods with excessive levels of saturated fats and sodium91


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