Sugar tax causes non-alcoholic beverages’ significant sales drop

The data of the Market Monitoring Centre (CMR) show that after the sugar levy entered into force in January 2021, the prices of non-alcoholic beverages increased on average by more than 10 percent and their average sales dropped by 16 percent.

CMR reiterated that the sugar levy on sweetened beverages entered into force on January 1 and is imposed on producers and importers. It is divided into a fixed and a variable part, depending on the amount of sugar in the drink.

According to the company's data, in the first 5 weeks after the introduction of the sugar tax, in independent small-format stores and those operating on a soft franchise basis, there was a decrease in sales of non-alcoholic beverages by 16 percent and the number of transactions by 25 percent compared to the same period in 2020. However, "in addition to the sugar tax, the negative dynamics are also affected by the restrictions related to the coronavirus pandemic", emphasised Julia Kijo from CMR.

Producers of carbonated drinks, energy drinks, iced teas and flavoured waters were most affected by the decline in sales. Flavoured waters are the next category, after carbonated drinks, to record a large increase in prices after the sugar levy. In 2021, they are almost 15 percent more expensive than in the corresponding period, and the volume of their sales decreased by 20 percent. A decline in both sales and transactions by 19 percent and 27 percent, respectively, was also recorded by the iced teas segment.

CMR is an independent research agency specialising in analysing transaction data obtained electronically from cash registers installed in grocery stores.