Quick answer: Taxes on sugar-sweetened beverages are now common. According to the World Health Organization, more than half of the world’s countries tax sugary drinks, although many rates are low. Well-known examples include Mexico’s tax introduced in 2014 and the United Kingdom’s Soft Drinks Industry Levy introduced in 2018. These taxes push brands to reduce sugar, change portion sizes and use sweetener systems that keep flavour while lowering total sugar.
Key takeaways – Sugar taxes mostly target drinks, not all foods. – Tiered taxes, like the UK levy, reward reformulation. – Brands respond with smaller portions, less sugar and smarter sweetener blends.
What is a sugar tax?
A sugar tax is usually an excise tax on sugar-sweetened beverages, such as soft drinks, sweetened juices and energy drinks. Designs vary:
| Design | How it works | Example |
|---|---|---|
| Volume-based | Fixed amount per litre | Mexico (2014) |
| Tiered by sugar | Higher tax for higher sugar content | UK Soft Drinks Industry Levy (2018) |
| Ad valorem | Percentage of the price | Used in some countries |
Why do governments introduce sugar taxes?
The WHO recommends limiting free sugars to less than 10 percent of daily energy intake. Governments use taxes as one tool to reduce sugar consumption and raise revenue for health programmes. In January 2026 the WHO called on countries to strengthen these taxes, noting that many current rates are too low to change behaviour significantly.
How do food and drink brands respond?
- Reformulation. Lowering sugar to fall into a lower tax band.
- Sweetener systems. Combining a natural sugar for taste and body with high-intensity sweeteners or fibres.
- Smaller packs. Reducing portion size and sugar per serving.
- New product lines. Launching low- and no-sugar variants.
- Clean-label focus. Choosing ingredients shoppers recognise.
Where does coconut sugar fit?
Coconut sugar is still a sugar, so it counts in sugar-tax calculations in the same way as other sugars. Its role is different: it brings caramel flavour, colour and a clean label, so brands can often use less total sweetener for a satisfying taste, or combine it with stevia, monk fruit or fibres in a reduced-sugar recipe. For products outside the scope of drink taxes, such as bakery and snacks, it supports a better-for-you positioning.
What should brands watch next?
- Extension of taxes from drinks to foods in some markets
- Front-of-pack warning labels linked to sugar levels
- Marketing restrictions for high-sugar products
- Retailer sugar-reduction targets
Frequently asked questions
Which countries have a sugar tax? More than half of the world’s countries tax sugar-sweetened drinks, including Mexico and the United Kingdom.
Does coconut sugar avoid sugar taxes? No. It is counted as sugar like other sugars.
How did the UK levy change drinks? Its tiered design encouraged many brands to reduce sugar before it started.
How can brands keep flavour with less sugar? By combining flavourful sugars with other sweeteners and fibres.
Looking for a reliable coconut sugar partner? Contact PT Integral Mulia Cipta (IMC Group) in Central Java, Indonesia: info@organic-coconut-sugar.com or WhatsApp +62 811 880 62273.
Sources: World Health Organization global report on health taxes (2026); WHO sugars intake guideline (2015); UK HM Revenue & Customs, Soft Drinks Industry Levy.
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