WHO urges tax reforms as alcohol and sugary drinks become too affordable

The WHO is warning that taxes on alcoholic and sugar-sweetened beverages are lacking, as prices of unhealthy drinks continue to drop in most countries.

In new reports, the UN agency urges countries to raise taxes and implement policies aimed at these groups. It blames industries for pressuring governments to limit increases, allowing harmful products to remain affordable. Meanwhile, health systems bear the financial burden of preventable noncommunicable diseases and harms linked to these products.

Nutrition Insight speaks with WHO’s economist Anne-Marie Perucic, who explains the new findings while discussing the main barriers preventing countries from implementing better taxes and how the reports address concerns about equity, affordability, and economic impact.

Perucic, from the Department of Health Determinants, Promotion and Prevention, states: “We know that taxes are an effective policy tool to increase the price of harmful products, which in turn reduces their consumption. But the tax needs to be well designed, well implemented, and regularly increased to have its intended effects.”

“These reports provide a summary of the global use of taxes applied on alcohol and sugar-sweetened beverages. They do not say anything about the health impact of those products’ consumption, but rather provide an objective overview of the state of taxation globally.” 

Sugar-sweetened beverage taxes selectively apply to certain products, and alcoholic beverages have become more affordable due to weak administration, according to the new analysis.

The Netherlands Comprehensive Cancer Organization has calculated that by 2050, just two fewer glasses of alcohol per week will prevent thousands of cancer diagnoses.

Other research has warned that sugar-sweetened beverages are linked to 2.2 million new type 2 diabetes cases and 1.2 million new cardiovascular disease cases worldwide in 2020. The health issues were seen to disproportionately impact regions like Latin America, the Caribbean and sub-Saharan Africa.

Tax administration remains weak

The reports reveal that at least 116 countries tax sugary drinks — mainly sodas. However, high-sugar drinks, such as 100% fruit juices, sweetened milk drinks, and ready-to-drink coffees and teas, are not included. Since 2023, 97% of countries tax energy drinks. This number remains unchanged.

WHO warns that weak tax systems have allowed alcohol and sugary drinks to become more affordable in most countries despite growing health costs.“The main barrier to implementing tax policies is reluctance from governments — often as a result of opposition from powerful industries — that they may lead to unintended consequences, such as that tax increases or tax reforms are not effective in reducing consumption, they can increase illicit trade, or are not feasible to implement,” explains Perucic.

“However, evidence keeps showing that those claims are unfounded.”

“For example, we know tax increases that make targeted products less affordable do reduce consumption, especially among low-income populations. We also know that illicit trade is mainly driven by weak administration rather than tax increases,” she says. “It is therefore suggested to have strengthened tax administration and enforcement as part of any plan to increase health taxes.”

Meanwhile, 167 countries tax alcoholic beverages and 12 ban them, a separate report finds. However, compared to 2022 prices, alcoholic drinks have remained the same or have become more affordable. The WHO points out that taxes in this category have not been updated alongside inflation and income growth.

“More affordable alcohol drives violence, injuries, and disease, while industry profits, the public often carries the health consequences and society the economic costs,” comments Dr. Etienne Krug, WHO’s director of the Department of Health Determinants, Promotion and Prevention. 

Bringing back political will

Commenting on WHO’s reports, Non-Communicable Disease Alliance’s director of Policy and Advocacy, Alison Cox, highlights that tobacco, alcohol, and sugar-sweetened beverage producers pushed back during the 2025 Political Declaration negotiations, showing the influence they have on national sovereignty. “Some governments framed health taxes as external interference rather than legitimate domestic policy tools.”

Taxes on beer, spirits, and sugar-sweetened beverages have failed to keep pace with inflation and income growth.“These sovereignty arguments can act as dog-whistle language, obscuring the reality: health taxes can support national autonomy by increasing capacity to respond to domestic health and fiscal challenges on their own terms.”

She explains that health taxes protect populations by making industries accountable for the social and economic costs of harmful products. Often the burden falls on people and public systems. These taxes also boost fiscal independence. 

“Yet evidence alone has not been enough to mobilize the political will required. Health taxes sit at the intersection of multiple sectors  — finance, trade, agriculture, and industry  — each with competing priorities.”

Benefits of multi-targeted policies

Perucic cites evidence showing that taxing alcoholic and sugary drinks reduces consumption more among low-income groups, leading to greater health benefits for them, which makes tax increases progressive.

“The reports recognize that tax increases alone are not enough and they should be coupled with a set of other effective policies, such as, for alcohol control, implementing policies to ban advertising, restricting availability of retailed alcohol, enforcing drink-driving laws, and providing support for persons with hazardous and harmful alcohol use.” 

“In parallel to improving and increasing taxes on sugar-sweetened beverages, key policy improvements in nutrition can include implementing front-of-pack labeling as part of comprehensive nutrition labeling policies,” adds Perucic. 

She posits that such policies can aid consumers’ understanding and food choices and improve food procurement and service policies for healthy diets.

The WHO has found that global excise share medians are 14% for beer and 22.5% for spirits. While the sugary drink median tax only accounts for 2% of common soda.“Implementing policies can protect children from the harmful impact of food marketing on diet by encouraging reformulation policies for healthier food and beverage products or implementing behavior change communication and mass media campaigns for healthy diets,” she underscores.

Affordability of alcohol and sugary drinks 

The WHO has found that global excise share medians are 14% for beer and 22.5% for spirits. While the sugary drink median tax only accounts for 2% of common soda, other types of sweetened beverages — making a large part of the market — are left out.

The agency flags that only a few countries adjust taxes for inflation.

Perucic explains: “The reports look at the evolution of affordability of the most sold brands of beer, the most sold type of spirits, and an internationally comparable sugar-sweetened carbonated beverage.”

“So far, there are two data points available, which enable us to compare the change in affordability of those beverages between 2022 and 2024. Results show that, unfortunately, those beverages have become more affordable or that their affordability has not changed for most countries globally.”

Moreover, the WHO finds that beer has only become less affordable since 2022 in 37 countries, while most countries are experiencing more affordability (56) or no change (21). Spirits became less affordable in 25 countries, while in 67 countries they became more affordable, and there was no change in 21 countries.

Meanwhile, sugar-sweetened carbonated beverages have become less affordable since 2022 in 34 countries. They are more affordable in 62 countries and saw no change in 24.

The report details: “Most countries apply either volume-based specific excise taxes (51 countries) or ad valorem excise taxes (50 countries) on sugar-sweetened carbonated beverages.”

Taxing for better health 

A recent study in Sweden found that food taxes can bring environmental and human health benefits without raising the average grocery bill. The researchers said food taxes could potentially prevent 700 premature deaths among people under 70 each year in the nation.

Additionally, a WHO policy brief argued that current food taxes are too narrow, often targeting just one nutrient like sugar. Since sugar is only a small part of food prices, companies can change recipes, or people can swap products to avoid taxes, which weakens their impact.