Asia Embraces Soda Taxes

Indonesia, India and the Philippines are focusing on taxing sugary drinks to improve the health of its citizens.

February 17, 2016

JAKARTA, Indonesia – Asian nations have turned to taxes on soda as a way to curb obesity and diabetes, the Financial Times reports. India, Indonesia and the Philippines are gearing up to implement a sugared beverage tax. In those countries, Euromonitor estimates the soft drink industry generates $18 billion.

The Filipino House of Representatives will soon vote on a 10% excise tax on all sugar-sweetened beverages. “In India and Southeast Asia, the prevalence [of obesity] is lower [than in Europe and the U.S.], but the increase in prevalence over the past decade in many cases is alarming,” Bruce Lee with the Johns Hopkins Bloomberg School of Public Health said.

While Indonesia vetoed a “luxury tax” on sugary drinks more than a decade ago, talk of a soda tax has been revived lately. An economic adviser recommended India levy a 40% tax on sugared drinks.

Soft drink companies have begun mounting aggressive campaigns opposing any soda tax. For example, Coca-Cola in India has come out swinging against any proposed taxes, noting that upping any tax would be detrimental to the market. “The category is still very small,” Triyono Prijosoesilo with the Association of Indonesian Soft Drink Producers said. “People change their choice of beverage easily—if they feel that a packaged tea becomes very expensive, they can switch to water or non-packaged beverages.”

Right now, Chile, France and Mexico have taxes on sugary drinks, as does Berkeley, California.