According to the World Health Organization, the affordability of sugary drinks and alcohol has increased due to inadequate taxation by governments, as revealed in two reports published on Tuesday.
Taxation Falls Short of Expectations
The World Health Organization is advocating for governments to raise taxes on sugary drinks and alcoholic beverages, citing the current tax rates as insufficient to reduce consumption and associated health problems. Although many countries have implemented excise taxes, the reports note that these rates are often too low and rarely adjusted for inflation, limiting their effectiveness.
A report focusing on sugary drinks found that at least 116 countries impose taxes on at least one type of sugar-sweetened beverage 9789240118942-eng. However, the median tax on a standard 330ml soda is only 2.4% of the retail price 9789240118942-eng, which is significantly lower than the level required to influence consumer behavior or encourage manufacturers to reduce sugar content in their products.
The taxation of sugary drinks is also inconsistent, with many countries failing to tax sweetened teas, fruit juices, and sweetened milk drinks, which are significant sources of free sugar intake, according to the WHO. The widespread availability of sugary drinks in schools, supermarkets, and convenience stores in both high-income and emerging economies poses a particular risk to young people.
Alcohol Prices Remain Relatively Low
A second report examining alcohol taxes found that 167 countries impose excise taxes on alcoholic beverages, while 12 countries have banned alcohol sales entirely 9789240118928-eng. Nevertheless, alcohol remains relatively affordable in many markets due to tax rates that have not kept pace with rising incomes and prices. Notably, at least 25 countries, mostly in Europe, do not tax wine, despite the well-documented health risks associated with alcohol consumption 9789240118928-eng.
Globally, excise taxes account for a median of 14% of the retail price of beer and 22.5% for spirits, which the WHO considers insufficient to significantly reduce consumption or alcohol-related harm.
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“More affordable alcohol drives violence, injuries and disease,” said Dr Etienne Krug, Director of WHO’s Department of Health Determinants, Promotion and Prevention.
Alcohol is responsible for over 2.6 million deaths annually and is linked to noncommunicable diseases, mental health conditions, and injuries 9789240118928-eng. The WHO also notes that alcohol-related harm disproportionately affects lower-income households, while health systems bear the resulting costs.
Addressing Policy Gaps and Revenue Potential
Both reports highlight the gap between formal adoption of taxes and their real-world effectiveness. Without regular inflation adjustments, even well-designed taxes lose value quickly. WHO points out that most countries lack automatic mechanisms to update rates, allowing sugary drinks and alcohol to become steadily more affordable relative to income.
The agency is calling for governments to incorporate stronger fiscal measures as part of its new “3 by 35” initiative, which aims to make tobacco, alcohol and sugary drinks less affordable by 2035.
Public support for higher health taxes appears stronger than policymakers often assume. WHO cited a 2022 Gallup poll showing that majorities in surveyed countries supported higher taxes on both sugary drinks and alcohol. While the organization stopped short of recommending specific rates, it emphasized that excise taxes remain one of the most cost-effective levers for reducing noncommunicable disease and alleviating budget pressures on health systems.
