Low taxes, which are not in line with inflation, are ineffective in reducing alcohol or sugary drink consumption, the World Health Organisation has warned, urging governments to hike these in efforts to slash obesity, diabetes, heart disease, cancer and other diseases, reports Euronews.
In two reports released last week, the WHO said low taxes were allowing these products to remain affordable, while global health systems struggle to cope with diseases that could be prevented.
Taxing booze and sugar-sweetened drinks is one of the most effective tools a government has to reduce consumption, the WHO argued.
"By increasing taxes on products like tobacco, sugary drinks, and alcohol, governments can reduce harmful consumption and unlock funds for vital health services,” said the agency’s Director-General Tedros Adhanom Ghebreyesus.
The agency is urging countries to raise and redesign taxes as part of its new initiative, which aims to increase the real prices of tobacco, alcohol, and sugary drinks by 2035.
The reports’ findings are based on an analysis of prices and tax levels for beer, spirits, and sugar-sweetened beverages in more than 150 countries in 2024, alongside a review of tax policies in around 180 countries. The WHO also compared the 2024 data with figures from 2022 to track changes over time.
Beer and spirits now cheaper, despite taxes
Alcohol consumption is one of the leading worldwide risks for more than 200 health conditions, with more than 2.6m people dying from alcohol-related conditions every year, the WHO said.
More than 160 countries tax alcoholic beverages, either based on the drink’s price or on its alcohol content. In some countries, it is also subject to general sales taxes that raise the prices of all goods.
However, the WHO found that beer and spirits have either become cheaper or stayed at the same price since 2022, because tax rates are not regularly adjusted to keep in line with inflation.
Fewer than one in four countries with alcohol taxes routinely update their tax rates, so inflation erodes their impact and makes alcohol more affordable over time.
Globally, beer is taxed at an average rate of 14% of its total price, while spirits are taxed at 22.5%.
At least 25 countries globally, mostly European, do not tax wine, despite what the WHO described as “clear health risks”, including a higher cancer risk in women who consume more than 1.5 litres of wine per week.
Only 28 countries earmark the revenue from alcohol taxes for prevention and treatment, such as alcohol-control programmes, public health campaigns, or healthcare system funding.
Calls for sugar-based taxes on drinks
Sugar-sweetened beverages (SSB) increase the risk of obesity, dental cavities and several chronic diseases, and are among the leading sources of sugar intake in many countries, with little or no nutritional value, the organisation added.
While 116 countries do tax some sugary drinks – like fizzy and energy drinks – most do not tax other high-sugar products, including fruit juices, sweetened milk drinks and premade coffees and teas.
Sugary drinks are either taxed on their overall price or the drink’s size, and fewer than one in four countries taxes drinks based on how much added sugar there is, despite WHO recommendations that sugar-based taxes are more effective, because it would encourage customers to switch to low or sugar-free options.
Taxes add an additional 2% to the price of a sugary drink, while nearly half of the countries that tax sugary drinks also tax bottled water, which the WHO discourages, saying healthy alternatives should remain affordable.
Of the 116 countries that apply taxes to sugary drinks, only 10 earmark their tax funds for health programmes.
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