As President Lee Jae-myung recently asked the public for opinions on introducing a "sugar levy (sugar charge)," related discussions within the government appear to be gaining momentum. The food industry is voicing concerns about rising cost pressures.
According to political circles and related industries on the 30th, the president on the 28th proposed via X (formerly Twitter) a plan to curb sugar use by imposing a sugar charge similar to tobacco and to use the funds to strengthen local and public health care. As a result, legal and policy reviews have begun, centered on political circles and the relevant ministries. However, some interpret it as closer to a "charge" aimed at raising funds for a specific purpose than a tax.
The food industry is uneasy about the sugar tax debate itself. The reason is that if a sugar tax is introduced, it could directly affect the cost structure across the food industry, not just specific items. In particular, with a strong dollar, rising raw material prices, and accumulating burdens from labor and logistics costs, additional cost pressures could further squeeze corporations' profitability, industry officials warned. Since sugar, like salt, is an essential materials and supplies that is difficult to eliminate entirely from consumption, some analysts also say that if a charge is imposed, corporations are likely to pass it on to product prices, leading to a perceived rise in inflation.
A food industry official said, "There are hardly any processed foods without sugar. It's hard to compare with cigarette price hikes because most people are consumers of processed foods," adding, "If a sugar tax is introduced, it will eventually be reflected in product prices, and the burden will be heavy not only on the industry but also on consumers."
Another official said, "With the strong dollar continuing and raw material price increases driving up costs, it is difficult to consider price hikes while the government is pressing with various regulations," adding, "Introducing a sugar tax is directly connected to cost increases, making it difficult for the food industry to respond. In particular, food companies focused on the domestic market are concerned about deteriorating results."
Overseas cases suggest that price hikes alone have limited impact on meaningfully reducing sugar consumption or obesity rates, and side effects such as increased "shopping trips" across borders, a contraction of the food industry, and job losses have been noted. According to the World Bank's global sugar-sweetened beverage (SSB) tax database and the World Health Organization (WHO), as of 2023, about 118 countries and regions, including the United Kingdom, the United States, France, Mexico, and Norway, are implementing taxation policies on sugary drinks.
The United Kingdom is cited as a representative case. Since 2018, the country has implemented the "Soft Drinks Industry Levy (SDIL)," imposing tiered taxes when the sugar content per 1 liter of beverage exceeds certain thresholds. After the policy took effect, the average sugar content of taxed beverages fell by about 30%, it was found. To avoid tax burdens, global beverage corporations such as Coca-Cola and Pepsi adjusted their product recipes and increased their share of sugar-free and low-sugar options. However, there are no study results or statistics showing that this change directly led to reduced obesity or diabetes prevalence among Britons.
In the United States, there is no federal-level sugar tax. Some cities, including Berkeley and Oakland in California and Philadelphia, have introduced sugar taxes. After the policies took effect, sales and consumption of sugar-sweetened beverages declined in the taxed areas. However, because the policies apply only at the city level, some people purchased sugar-sweetened beverages in neighboring areas.
Nordic countries have also implemented tax policies related to sugar. Norway has long maintained taxation on sugar and sweeteners. After introducing a sugar tax in 1922, it has levied taxes on candy, chocolate, and soft drinks. In 2018, it sharply raised tax rates on sugary drinks and confectionery, but as problems such as backlash from retailers and increased "shopping trips" to neighboring countries like Sweden were noted, adjustments were made in 2020 to return the rates to previous levels.
Denmark is cited as a representative country that abolished the sugar tax. Since the 1930s, Denmark had imposed a so-called "soft drink tax" on carbonated beverages, but citing inflation and shopping trips across borders as problems, it lowered the rate in 2013 and fully abolished the soft drink tax in Jan. 2014. Recently, discussions have reportedly continued on cutting taxes related to candy, chocolate, and high-sugar foods to ease the cost-of-living burden.
A Korea Food Industry Association official said, "The Ministery of Food and Drug Safety has already been implementing a comprehensive sugar reduction plan since 2016 and related initiatives have continued, reducing sugar usage," adding, "Even if limited to processed foods, there are limits to achieving the policy's goals, and limits to promoting health. We are concerned whether a sugar tax would align with the government's intention to use it for public health care finances."
Lee Eun-hee, a professor of consumer science at Inha University, also said, "If the sugar tax goes up, consumer prices for products containing sugar are bound to rise. Even if replaced with artificial sweeteners, there are safety issues, and in terms of price, there are limits to fully substituting them," adding, "Introducing a sugar tax would only result in higher food prices. Ultimately, the burden will be passed on to consumers."
Meanwhile, the Democratic Party of Korea plans to hold a "National Assembly forum on charges for excessive sugar use" on the 12th of next month to gather opinions.