They’re ubiquitous, cheap, and potentially addictive. These days, sugar-laden drinks—sodas, sports drinks, energy drinks, and fruit drinks—are impossible to avoid. And despite mountains of evidence for the harm they cause, the market for these beverages is booming. 

 

In many low- and middle-income countries (LMICs), sodas are becoming increasingly affordable, accessible, and appealing. This corresponds to rising incomes, more efficient supply chains, and an increase in the prevalence of western-style diets. Unfortunately, it’s a recipe for a public health disaster.  

 

 In 2021, the global market for soft drinks was valued at an estimated US$413 billion, a staggering number that forecasters expect to increase to over US$600 billion by 2030.1 This rising consumption of sugar-sweetened beverages (SSBs) represents a growing public health threat. Calorie-dense and offering little nutritional value, a review of scientific evidence by the World Bank found that SSBs are a risk factor for heart disease, diabetes, obesity, teeth cavities—even cancer, while a study published in 2019 by the Harvard T.H. Chan School of Public Health linked the consumption of SSBs with an increased risk of premature death. 

 

“As the burden of noncommunicable diseases (NCDs) becomes clearer every day, countries are recognizing the need for population-level interventions and for exploring more innovative policy measures,” says Kate Mandeville, Senior Health Specialist at the World Bank and a driving force behind a recently launched SSB tax database. “SSB taxes are one tool we have to start to tackle this issue.”  

 

Although some of the earliest taxes on SSBs started in the 1940s, they have become increasingly popular over the last decade, with countries from Mexico to South Africa introducing them. When the worldwide effects of COVID-19 took hold in early 2020, SSB taxes became even more appealing to countries facing fiscal shortfalls and looking for new sources of revenue.  

 

SSB taxes represents an innovative approach to accelerating progress toward meeting the UN Sustainable Development Goals by 2030. “We’re seeing positive evidence emerging of the impact of innovative health policies like SSB taxes on improved population health outcomes, particularly in teenagers,” Kate says. Recent studies of the SSB taxes in Mexico and the UK have found these led to reduced obesity in adolescent girls.   

 

In fact, SSB taxes could play an especially important role in achieving health equity—that is, improving health outcomes despite barriers presented by income, geography, and other factors—simply because lower-income households tend to consume more of these beverages and therefore disproportionately bear their negative health effects. Indeed, the reductions in obesity associated with the UK’s SSB tax were greatest in girls whose schools were in the most disadvantaged areas.  

 

Kate and her team have focused on supporting Ministries of Health and especially Ministries of Finance that are considering introducing SSB taxes. “Countries are the ones driving these policies,” she says. “Our role is to support governments to make informed decisions around the design and implementation of SSB taxes, for example, which requires providing evidence, modeling the outcomes, and understanding the long-term impact on both the population and tax revenue.” 

 

SSBs are often described as the “new tobacco” and not just because of the damage they do to public health. Like tobacco and alcohol, talk of taxes on SSBs has been met with significant pushback from the industry and beyond. Some critics consider such a tax an infringement on personal freedom while others claim that such a tax is regressive—meaning it unfairly targets lower-income people—or could also lead to job cuts.  

 

But will imposing an SSB tax hit poorer populations hardest? Will it lead to increased unemployment? They’re fair questions. That’s why the World Bank has developed a package of support, advice, and analysis to address these and other concerns for governments considering the tax, generating evidence needed to convince policymakers and the public. For example, in Kazakhstan, taking into account the longer-term effects on medical expenses and productivity meant that a SSB tax was actually progressive: people in poorer groups benefited more than richer groups. And evidence from independent evaluations of SSB taxes shows no evidence of job losses from SSB taxes, and in fact there were gains.  

 

Nigeria was among the countries who needed to overcome vocal opposition before implementing an SSB tax. The World Bank team worked with a range of stakeholders thereincluding the country’s Ministries of Health and Finance, patient organizations, and researchersto provide evidence, such as estimating the number of new cases of diabetes, heart disease, and stroke that would be prevented with a SSB tax. These efforts paid off in 2021, when Nigeria successfully passed its tax.   

 

“Evidence is powerful in mobilizing support,” Kate says. “Even more persuasive is local evidence. Recognizing local concerns and generating local evidence that responds directly to those concerns is much harder to ignore and push back on.” 

 

Early in the project, the team identified one of the biggest gaps: a comprehensive understanding of current SSB tax models and practices worldwide. Through a project supported by Access Accelerated, Kate and her team created a database of SSB taxes worldwide, which was launched on March 29.  

 

Aimed at researchers, policymakers, and the public, the database offers insights into current coverage of SSB taxes, different tax models, and the design decisions made by various countries. All told, the database reveals that there are around 118 taxes in 103 countries and territories, covering 51% of the world’s population.  

 

“There are many more taxes on SSBs than we previously thought,” Kate says. “Perhaps even more surprising, we are seeing that their prevalence and popularity is much wider in LMICs. Lower-income countries are really taking the lead”. Indeed, over two thirds of the population in low- and lower-middle-income countries are covered by SSB taxes, compared to less than a third in upper-middle-income and high-income countries.   

 

The database also identified that too many SSB taxes worldwide include healthy substitutes to SSBs, such as unsweetened bottled water, in their taxed products. Indeed, almost a third of SSB excise taxes (the most common type of tax) globally and almost half of excise taxes in LMICs apply to unsweetened water. “Widening SSB taxes to cover as many types of SSBs as possible – such as sweetened bottled teas or flavored milk – is a really good direction as it discourages sugar consumption and increases revenue,” explains Kate, “However excluding the healthy drinks that people could switch to – such as unsweetened bottled water – would immediately make many taxes much more effective.” 

 

The next phase of the project will include deepening the database and communicating the evidence to researchers and policymakers. Ultimately, the intention is for countries to use the evidence to design tax models that work for their specific needs, as well as to improve on current practices.  

 

“An SSB tax is one intervention within a package of policies to tackle NCDs,” says Kate. “It’s also an important signaling tool by governments to show that they are doing things differently. It’s an exciting time to be at the frontier of collecting evidence that can contribute to health policy and ultimately save lives.”  

 

Explore the Global SSB Tax Database, launched by the World Bank with the support of Access Accelerated, here.