The World Health Organization (WHO) is calling on governments to raise taxes on sugary and alcoholic beverages, citing concerns over their increasing affordability and the resulting health issues. New analyses reveal that these products are becoming more accessible in many nations, leading to a rise in preventable diseases and straining healthcare systems.
Inadequate Taxation Exacerbates Health Risks
Two full reports released Tuesday examine global taxation policies on sugar-sweetened beverages (SSBs) and alcohol. The findings indicate that while most countries impose excise taxes, these are often too low, poorly structured, and not adjusted for inflation. Consequently, consumption rates, particularly among youth, remain high, contributing to a surge in noncommunicable diseases linked to diet and alcohol.
“Sugary drinks and alcoholic beverages are getting cheaper, fueling obesity, diabetes, heart disease, cancers and injuries,” WHO stated. “Health taxes are one of the strongest tools we have for promoting health and preventing disease,” added Director-General Dr. Tedros Adhanom Ghebreyesus.
The first report focuses on sugary drinks, noting that 116 countries tax at least one SSB category. However, the median excise tax on a 330ml soda is a mere 2.4% of its retail price, insufficient to alter buying habits or encourage lower-sugar product reformulation.
Taxation coverage is inconsistent. While sodas and energy drinks are commonly taxed, sweetened teas, fruit juices, and milk drinks often escape taxation, despite being significant sugar sources. Young people are particularly vulnerable, with easy access to sugary drinks in schools, supermarkets, and convenience stores across both developed and emerging economies.
WHO advocates for stronger excise tax designs, including inflation adjustments and sugar-content-based taxes, to enhance effectiveness and generate revenue for healthcare systems.
Alcohol Taxation Falls Short of Health Goals
The second report assesses alcohol taxes, revealing that 167 countries impose excise taxes on alcoholic beverages, while 12 ban sales entirely. Despite this, alcohol remains affordable in many markets due to tax rates failing to keep up with income and price growth. Notably, wine is untaxed in at least 25 countries, primarily in Europe, despite well-documented health risks.
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Globally, excise taxes represent a median of 14% of beer’s retail price and 22.5% for spirits, levels WHO deems inadequate to curb consumption or alcohol-related harm.
“More affordable alcohol drives violence, injuries and disease,” said Dr. Etienne Krug, Director of WHO’s Department of Health Determinants, Promotion and Prevention.
Alcohol contributes to over 2.6 million annual deaths and is linked to noncommunicable diseases, mental health issues, and injuries. WHO highlights that alcohol-related harm disproportionately impacts lower-income households, while healthcare systems bear the financial burden.
Revenue Potential and Policy Reform
Both reports show the disparity between tax adoption and real-world impact. Without inflation adjustments, even well-designed taxes quickly lose value. WHO notes that most countries lack mechanisms to automatically update tax rates, allowing sugary drinks and alcohol to become increasingly affordable relative to income.
WHO urges governments to adopt stronger fiscal measures as part of its “3 by 35” initiative, aiming to reduce the affordability of tobacco, alcohol, and sugary drinks by 2035.
Public support for higher health taxes is stronger than policymakers assume. WHO cites a 2022 Gallup poll showing majority support in surveyed countries for increased taxes on sugary drinks and alcohol. While not recommending specific rates, WHO emphasizes that excise taxes are a cost-effective means to reduce noncommunicable diseases and ease healthcare system budgets.
