Back to Prevention

Prevention: Tax and pricing

Case for a tax on sugar-sweetened beverages (SSBs) in Australia

Last updated 09-11-2021

The obesity-related price policy that has received the most attention in Australia to date is a tax on sugar-sweetened beverages (SSBs). Such taxes have been shown to reduce consumption of SSBs. Taxes can also encourage manufacturers to reformulate SSBs to reduce sugar content and the funds from taxes can be used to take further steps to reduce overweight and obesity.

Key Evidence


In 2011–12, 52% of Australians’ free sugar consumption came from SSBs. Consumption of SSBs in Australia is highest among men aged 18–24 years, with 62% being daily consumers, drinking an average of 3.4 cups a day


Over 50 countries have introduced SSB taxes and robust evidence has confirmed a drop in consumption following the tax’s introduction in many jurisdictions, including in the UK (2018), Mexico (2014), South Africa (2018), Chile (2014) and various US regions and cities (Portland (1991), Cleveland (2003), Berkeley (2015))


Over 20 key health and community groups in Australia have called for an SSB tax and public support for an SSB tax is high at 77%

In Australia, the price policy that has received the most attention to date, regarding obesity, is a tax on sugar-sweetened beverages (SSBs). SSBs are beverages with added caloric sweeteners or 'free sugars', such as sucrose, high-fructose corn syrup or fruit juice concentrate. This includes soft drinks, sports drinks, fruit drinks, energy and vitamin water drinks, sweetened mineral waters and cordials. These beverages contribute no valuable nutrients to consumers’ diets but deliver large quantities of sugar – a single can of Coke, for example, contains 40g of sugar (approximately 10 teaspoons).1 SSBs are an easy-to-define category of products that are energy dense and nutrient poor, and can be readily substituted for healthier options (such as water).2

A tax on sugar-sweetened beverages

The primary motivation for taxing SSBs is to decrease their purchase and consumption, with the aim of improving diets and reducing Australia’s burden of chronic disease as part of a comprehensive approach to addressing obesity. Taxes can also encourage beverage manufacturers to reformulate their products to reduce sugar content; convey the message that the products are a matter of concern for public health; and raise revenue that can be used for health initiatives.3 It should be noted that the introduction of the 10% Goods and Services Tax (GST) in 2000 reduced the tax on soft drinks in Australia from the previous 22% sales tax.4

Free sugar consumption in Australia

Australian Health Survey data shows that more than half of Australians aged two years and older exceeded the World Health Organization’s recommended limits on energy from free sugars in 2011–12.5 Free sugars are sugars added to foods by manufacturers or consumers, and those naturally present in honey, syrups and fruit juices. The WHO recommends limiting energy from free sugars to less than 10% of daily energy intake (around 12 teaspoons) and 5% for optimum health outcomes. In 2011–12, Australians aged two years and older consumed an average of 60 grams of free sugar per day (14 teaspoons), with 52% of this free sugar coming from SSBs.5 Australians are high per-capita consumers of SSBs, and consumption is highest among young men aged 18–24 years.6 Of the men in that age group, 62% were daily consumers of SSBs, and those consumers drank an average of 3.4 metric cups of SSB per day.7

Health impacts of sugar-sweetened beverages

Obesity is a risk factor for chronic disease including cardiovascular disease, type 2 diabetes and some cancers. While overweight and obesity are complex conditions with multiple causes, evidence shows that regular consumption of SSBs is associated with increased energy intake, long-term weight gain and obesity.8 Their association with weight gain appears to be linked to a reduced feeling of fullness when sugars are consumed in a liquid form.9 Consumers do not compensate for the additional energy from consumption of SSBs by reducing consumption of other foods and further, SSBs can induce hunger.10 At a young age, SSB consumption can enhance preferences for sweet food and drinks, and displace more nutritious beverages such as milk.

Impact of taxes on sugar-sweetened beverages

Evidence shows that vulnerable populations such as young people, low-income consumers and those most at risk of obesity, are most responsive to changes in the relative prices of food and beverages.11

As of 2021, more than 50 countries have introduced a tax on SSBs. Robust evidence from some of these countries shows that taxes have been successful in reducing consumption, including in the UK,12 Mexico,1314 Portugal,15 Chile16 and some US regions.1718192021 Evidence also shows that SSB taxes have encouraged industry reformulation of SSBs, for example in the UK following the introduction of a tiered volumetric tax in 2018.2223

In turn, reduced consumption of SSBs is significantly associated with weight loss.24 Evidence continues to build about the scale of health benefits that will flow from SSB taxes due to reduced purchase and consumption of these beverages. Modelling studies have predicted large reductions in cases of cardiovascular disease, stroke, diabetes and some cancers.2526

See Countries that have taxes on sugar-sweetened beverages (SSBs) for more details and analysis on the impact of SSB taxes in other countries.

Potential benefits of an Australian tax on sugar-sweetened beverages

Australian modelling studies predict that an SSB tax would reduce consumption of SSBs and have a positive impact on Australians’ health, while raising significant government revenue.

An Australian study based on dietary intake data estimated the consequences of an additional 20% tax on SSBs in Australia on health and health care expenditure.26 The results show that a 20% tax on SSBs would result in an average 12.6% decline in daily consumption of SSBs, and a decline in obesity of 2.7% in men and 1.2% in women over a lifetime. The study concluded that there would be sustained reductions in the incidence of type 2 diabetes, cardiovascular disease, and some cancers.

Over a 25-year period, there could be:

  • 16,000 fewer cases of type 2 diabetes
  • 4,400 fewer cases of heart disease
  • 1,100 fewer cases of stroke.

It is estimated that 1,606 more Australians would be alive in 25 years, with millions of dollars saved in healthcare costs, and that the tax could generate in excess of $400 million (AUD) annually.26 Another economic modelling study has shown that almost 50% of the health care savings generated by a 20% tax on SSBs in Australia would accrue in the most disadvantaged groups.22

A 20% tax on SSB in Australia was predicted to be highly cost-effective in a modelling study performed by a collaboration of Deakin University, Global Obesity Centre, The University of Queensland and The George Institute for Global Health.23 When compared to 15 other potential interventions for preventing obesity, a 20% SSB tax was the second most cost effective. The total cost savings of such an intervention were estimated to be $1.7 billion, with a gain of 175,300 HALY (health-adjusted life years). An SSB tax was also predicted to have a positive impact on equity of health outcomes, with higher health gains in the lower socioeconomic groups.23

After modelling the impacts on sugar consumption and government revenue, the Australian Medical Association (AMA) strongly recommend a CPI-indexed SSB tax that increases the retail price by 20%.27 Their study predicted that such a tax would lead to a 12% to 18% reduction in sugar consumption from soft drinks and raise annual government revenue of $749 to $814 million. The AMA’s modelling also predicted that if no action is taken to halt the ongoing obesity crisis, the direct healthcare costs of obesity between 2021 and 2025 will cost taxpayers a further $29.5 billion.27

Support for Australian tax on SSBs

A national survey conducted in 2017 showed that 77% of Australians supported a tax on sugary drinks, if the proceeds were used to fund obesity prevention.28

The Select Committee into the Obesity Epidemic in Australia recommended an SSB tax in its 2018 final report. Among 22 recommendations, they stated that the Australian Government should introduce a tax on SSBs, with the objectives of reducing consumption, improving public health and accelerating the reformulation of products. The committee predicted that such a tax would compel the food industry to reformulate its products, influence purchasing and consumption behaviours, and convey the message that the Australian Government is committed to discouraging the consumption of SSBs.29

Numerous organisations also support an Australian tax on SSBs including:

  • Australian Chronic Disease Prevention Alliance30
  • Australian Council of Social Services31
  • Australian Dental Association32
  • Australian Healthcare and Hospitals Association33
  • Australian Medical Association34
  • Australian and New Zealand Obesity Society35
  • Australia New Zealand Metabolic and Obesity Surgery Society35
  • Baker Heart and Diabetes Institute35
  • Cancer Council Australia30
  • Committee of Presidents of Medical Colleges36
  • Consumers Health Forum of Australia35
  • Dental Hygienists Association of Australia37
  • Diabetes Australia38
  • Grattan Institute39
  • Heart Foundation30
  • Kidney Health Australia30
  • Menzies School of Health Research35
  • National Rural Health Alliance40
  • Nutrition Australia35
  • Obesity Australia35
  • Obesity Policy Coalition41
  • Parents’ Voice35
  • Public Health Association of Australia35
  • Royal Australian College of General Practitioners (broadly supportive)3642
  • Royal Australasian College of Physicians43
  • Stroke Foundation30
  • YMCA35


1. Obesity Policy Coalition. Policy brief: A comprehensive policy program to reduce consumption of sugar-sweetened beverages in Australia. Melbourne, Australia 2018. Available from:
2. World Health Organization Regional Office for Europe. Using price policies to promote healthier diets. Copenhagen, Denmark 2015. Available from:
3. Obesity Policy Coalition. Policy brief: The case for a health levy on sugar-sweetened beverages Melbourne, Australia 2018. Available from:
4. Kenny P. The GST Food Exemption. Journal of Australian Taxation, 2000. Available from:
5. Australian Bureau of Statistics. 4364.0.55.011 - Australian Health Survey: Consumption of added sugars, 2011-12. 2017. Available from:
6. Australian Bureau of Statistics. National Health Survey: First Results, 2017-18. Canberra, Australia 2018. Available from:
7. Australian Bureau of Statistics. Table 12 - Consumption of fruit, vegetables, and sugar sweetened and diet drinks - Australia, Persons, 4364055001DO012_20172018 National Health Survey: First Results, 2017–18 — Australia, 2018. Available from:
8. Te Morenga L, Mallard S, and Mann J. Dietary sugars and body weight: systematic review and meta-analyses of randomised controlled trials and cohort studies. BMJ : British Medical Journal, 2012; 346:e7492.
9. National Health and Medical Research Council. Australian Dietary Guidelines. Canberra, Australia 2013. Available from:
10. Vartanian LR, Schwartz MB, and Brownell KD. Effects of soft drink consumption on nutrition and health: a systematic review and meta-analysis. American Journal of Public Health, 2007; 97(4):667-75. Available from:
11. World Health Organization. Fiscal policies for diet and prevention of noncommunicable diseases: technical meeting report. 2016. Available from:
12. Public Health England. Sugar reduction: Report on progress between 2015 and 2019. London: PHE, 2020. Available from:
13. Colchero MA, Rivera-Dommarco J, Popkin BM, and Ng SW. In Mexico, Evidence Of Sustained Consumer Response Two Years After Implementing A Sugar-Sweetened Beverage Tax. Health Affairs, 2017; 36(3):564-71. Available from:
14. Sánchez-Romero LM, Canto-Osorio F, González-Morales R, Colchero MA, Ng SW, et al. Association between tax on sugar sweetened beverages and soft drink consumption in adults in Mexico: open cohort longitudinal analysis of Health Workers Cohort Study. BMJ, 2020; 369:m1311. Available from:
15. Goiana-da-Silva F, Cruz ESD, Gregório MJ, Miraldo M, Darzi A, et al. The future of the sweetened beverages tax in Portugal. Lancet Public Health, 2018; 3(12):e562. Available from:
16. Nakamura R, Mirelman AJ, Cuadrado C, Silva-Illanes N, Dunstan J, et al. Evaluating the 2014 sugar-sweetened beverage tax in Chile: An observational study in urban areas. PLoS Medicine, 2018; 15(7):e1002596. Available from:
17. Wright A, Smith KE, and Hellowell M. Policy lessons from health taxes: a systematic review of empirical studies. BMC Public Health, 2017; 17:583.
18. Thow AM, Downs S, and Jan S. A systematic review of the effectiveness of food taxes and subsidies to improve diets: Understanding the recent evidence. Nutrition Reviews, 2014; 72(9):551-565. Available from:
19. Teng AM, Jones AC, Mizdrak A, Signal L, Genç M, et al. Impact of sugar-sweetened beverage taxes on purchases and dietary intake: Systematic review and meta-analysis. Obesity Reviews, 2019; 20(9):1187-204. Available from:
20. Lee MM, Falbe J, Schillinger D, Basu S, McCulloch CE, et al. Sugar-Sweetened Beverage Consumption 3 Years After the Berkeley, California, Sugar-Sweetened Beverage Tax. American Journal of Public Health, 2019; 109(4):637-9. Available from:
21. Cawley J, Frisvold D, Hill A, and Jones D. The impact of the Philadelphia beverage tax on purchases and consumption by adults and children. Journal of Health Economics, 2019; 67:102225. Available from:
22. Lal A, Mantilla-Herrera AM, Veerman L, Backholer K, Sacks G, et al. Modelled health benefits of a sugar-sweetened beverage tax across different socioeconomic groups in Australia: A cost-effectiveness and equity analysis. PLoS Medicine, 2017; 14(6):e1002326. Available from:
23. Ananthapavan J, Sacks G, Brown V, Moodie M, Nguyen P, et al. Assessing Cost-Effectiveness of Obesity Prevention Policies in Australia 2018 (ACE-Obesity Policy). Melbourne, Australia: Deakin University, 2018. Available from:
24. Chen L, Appel LJ, Loria C, Lin PH, Champagne CM, et al. Reduction in consumption of sugar-sweetened beverages is associated with weight loss: the PREMIER trial. The American Journal of Clinical Nutrition, 2009; 89(5):1299-306. Available from:
25. Niebylski ML, Redburn KA, Duhaney T, and Campbell NR. Healthy food subsidies and unhealthy food taxation: A systematic review of the evidence. Nutrition, 2015; 31(6):787-95. Available from:
26. Veerman JL, Sacks G, Antonopoulos N, and Martin J. The impact of a tax on sugar-sweetened beverages on health and health care costs: A modelling study. PLoS One, 2016; 11(4):e0151460. Available from:
27. Australian Medical Association. A tax on sugar-sweetened beverages: Modelled impacts on sugar consumption and government revenue., Canberra, Australia: AMA, 2021. Available from:
28. Miller CL, Dono J, Wakefield MA, Pettigrew S, Coveney J, et al. Are Australians ready for warning labels, marketing bans and sugary drink taxes? Two cross-sectional surveys measuring support for policy responses to sugar-sweetened beverages. BMJ Open, 2019; 9(6):e027962. Available from:
29. Commonwealth of Australia. Final report of the Select Committee into the Obesity Epidemic in Australia., Canberra, Australia: Australian Government, 2018. Available from:
30. Australian Chronic Disease Prevention Alliance. Sugary drinks. 2017. Available from:
31. MacDonald E. Correspondence to the Select Committee into the Obesity Epidemic in Australia.: Australian Council of Social Service, 2018. Available from:
32. Australian Dental Association. ADA NSW position on a sugar-sweetened beverage levy. Available from:
33. Australian Healthcare and Hospitals Association. Sugary drinks tax remains a necessity to reduce obesity and improve health. 2018. Available from:
34. Australian Medical Association. AMA puts sugar tax back on the national agenda. 2021. Available from:
35. Obesity Policy Coalition. Tipping the scales: Australian obesity prevention consensus. 2017. Available from:
36. Committee of Presidents of Medical Colleges. National Health Summit on Obesity: Report and consensus statement for action. 2016. Available from:
37. Rethink Sugary Drink. Health levy on sugar-sweetened beverages: Rethink sugary drink position statement 2017. Available from:
38. Diabetes Australia. Position Statement: Health levy on sugar-sweetened beverages. 2017. Available from:
39. Grattan Institute. A sugary drinks tax: Recovering the community costs of obesity. 2016. Available from:
40. National Rural Health Alliance. Alliance backs a sugar tax and tougher rules on food ads. 2018. Available from:
41. Obesity Policy Coalition. Pricing measures. Available from:
42. Liotta M. Sugar coated: Health experts condemn soft drink Christmas marketing campaign. 2018. Available from:
43. Royal Australasian College of Physicians. Action to prevent obesity and reduce its impact across the life course. 2018. Available from: