Onome Amuge
The World Health Organization’s renewed call for higher taxes on sugary drinks and alcohol is reopening a global fault line between public health ambition and economic pragmatism, as governments, industries and emerging-market policymakers weigh whether fiscal tools can deliver lasting health gains without inflicting collateral damage on growth, jobs and consumer welfare.
Unveiled alongside two new global reports, WHO asserted that weak and outdated tax systems are allowing products linked to non-communicable diseases to become steadily more affordable, even as health systems struggle under the cost of treating preventable illness. The organisation argues that governments are missing both a public health opportunity and a fiscal one.
“By increasing taxes on products like tobacco, sugary drinks and alcohol, governments can reduce harmful consumption and unlock funds for vital health services,” Tedros Adhanom Ghebreyesus, the WHO’s director-general, said in remarks accompanying the reports.
Yet while the logic of health taxes has gained traction in policy circles, the latest push has highlighted growing resistance from business groups and from policymakers in developing economies who question whether a largely global prescription can be safely applied to vastly different economic contexts.
A fiscal lever under scrutiny
Central to the WHO’s case is the issue of affordability. Its data indicate that, in real terms, sugary drinks and alcoholic beverages have become progressively cheaper across many countries over the past decade, as excise duties have failed to keep pace with inflation and rising incomes.
At least 116 countries now levy some form of tax on sugar-sweetened beverages, the reports show, while 167 tax alcoholic drinks and 12 prohibit alcohol entirely. But coverage and design vary widely. Many high-sugar products, including 100 per cent fruit juices, sweetened milk drinks and ready-to-drink coffees and teas, fall outside tax regimes. Median sugar taxes account for just 2 per cent of the retail price of a standard soda, far below levels the WHO believes are necessary to change consumption patterns.
Alcohol taxes tell a similar story. Median global excise rates stand at about 14 per cent for beer and 22.5 per cent for spirits, levels the WHO considers modest given alcohol’s links to injury, violence and chronic disease. Since 2022, alcohol has become more affordable or has seen little real price increase in most countries, the reports say.
The WHO argues that this trend has contributed to rising rates of obesity, diabetes, cardiovascular disease, cancers and injuries, particularly among children and young adults. Etienne Krug, director of the organisation’s department of health determinants, promotion and prevention, said cheaper alcohol in particular was driving social harm. “The public often bears the health and economic costs, while industry profits,” he said.
To reverse this, the WHO has launched its “3 by 35” initiative, urging governments to raise the real prices of tobacco, alcohol and sugary drinks by 2035. The ambition is both behavioural and fiscal, as it intends to make harmful products less attractive while generating revenue to fund health, education and social protection.
The organisation points to the UK’s soft drinks industry levy as evidence that well-designed taxes can work. Introduced in 2018, the levy incentivised reformulation, reduced sugar content across many products and, according to the WHO, generated £338 million in additional revenue in 2024 alone. Obesity rates among girls aged 10 and 11 have fallen, particularly in more deprived communities.
Industry pushback intensifies
Industry groups, however, argue that the WHO is overstating the universality of such success stories. The International Council of Beverages Associations (ICBA), which represents non-alcoholic drink producers across more than 200 countries, has criticised the organisation’s 2025 Global Report on Sugar-Sweetened Beverage Taxes as selective and misleading.
Katherine Loatman, ICBA’s executive director, said the association shared the WHO’s goal of reducing diet-related disease but disputed the emphasis on taxation. “More than a decade of global experience shows that beverage taxes have not reduced obesity rates or delivered meaningful public health outcomes,” she said.
According to ICBA, the WHO downplays alternative measures that have demonstrably reduced sugar intake, including reformulation, smaller portion sizes and clearer labelling. Loatman also noted that the WHO itself has previously concluded that sugar-sweetened beverage taxes are not “Best Buy” interventions, a designation reserved for policies that deliver the greatest health impact for the lowest cost.
“These taxes raise the cost of daily life for consumers and do not help people achieve balanced diets,” she said, adding that industry-led initiatives to expand low- and no-sugar options offered a more pragmatic path.
The clash underscores a debate about whether fiscal tools should be central or complementary in public health strategies. While advocates see taxes as efficient and scalable, critics argue that they are blunt instruments that may disproportionately affect lower-income households and fail to address deeper behavioural and structural drivers of poor health.
Nowhere is this tension more pronounced than in emerging economies, where inflation, weak purchasing power and fragile industrial bases complicate the policy calculus. Nigeria has become a focal point of the debate.
Renewed domestic calls for higher taxes on sugar-sweetened non-alcoholic beverages have drawn warnings from business groups that additional fiscal pressure could undermine one of the country’s most important manufacturing sectors.
Muda Yusuf, chief executive of the Centre for the Promotion of Private Enterprise (CPPE), said sugar-specific taxes were being promoted as a policy shortcut without sufficient regard for Nigeria’s economic realities. “Public health challenges undoubtedly require urgent attention. But the proposition of a sugar tax, particularly in the current Nigerian context, is misplaced and insufficiently grounded in empirical evidence,” he said.
Nigeria’s food and beverage industry accounts for about 40 per cent of total manufacturing output, according to the National Bureau of Statistics, making it a cornerstone of industrial activity, employment and value creation. The non-alcoholic beverage segment alone supports a vast value chain stretching from farmers and agro-input suppliers to packaging firms, logistics providers, retailers and hospitality businesses.
Millions of livelihoods depend directly or indirectly on the sector. CPPE argues that policies which constrain output or investment could trigger job losses, reduced household incomes and setbacks to poverty reduction.
Manufacturers also contend that they are already among the most heavily taxed businesses in the country. Fiscal obligations include a 30 per cent company income tax, 7.5 per cent value-added tax, a N10-per-litre excise duty, a 4 per cent national development levy, a 4 per cent free-on-board levy on imported inputs, import duties of up to 15 per cent, an ECOWAS levy, property taxes and a patchwork of state and local charges.
These burdens are layered on top of high energy costs, weak transport infrastructure, exchange-rate volatility and elevated interest rates. Retail prices of many non-alcoholic beverages have risen by about 50 per cent over the past two years, even without new taxes, eroding consumer affordability.
In such an environment, Yusuf argues, additional levies risk depressing demand, discouraging investment and reversing tentative industrial gains. “Taxation does not address the root causes of non-communicable diseases,” he said, pointing instead to poor diet quality, carbohydrate-heavy meals, sedentary lifestyles, urban design and genetic factors.
