Consumer

The Italian sugar tax in the European context

February 27, 2025

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The Italian sugar tax, or soda tax, set to take effect on July 1, 2025, is a volumetric excise tax targeting sugar-sweetened beverages (SSBs) with more than 25 grams of added sweeteners per liter. This tax is part of a broader global effort to combat obesity and related non-communicable diseases (NCDs) by reducing the consumption of sugary drinks. The tax rate is set at €0.10 per liter for all SSBs exceeding the sugar threshold, with the aim of discouraging excessive sugar intake and encouraging healthier beverage choices.

Table of Contents

Mechanism of the Italian sugar tax

The Italian sugar tax is designed as a volumetric excise tax, meaning it is applied based on the volume of the beverage rather than its sugar content. This approach simplifies the tax structure but has been criticized for potentially lacking the precision needed to incentivize product reformulation.

The tax applies to all SSBs, including carbonated soft drinks, iced teas, fruit drinks, and energy drinks, but excludes beverages with less than 25 grams of sugar per liter, such as diet drinks and certain fruit juices.

The sugar tax is levied on manufacturers, who are expected to pass the cost onto consumers through higher retail prices. Empirical studies suggest that manufacturers often over-shift the tax burden, meaning they increase prices by more than the tax rate itself. This over-shifting may therefore lead to moderate price hikes for consumers.

Possible impact on sugars intakes and health

The primary goal of the Italian sugar tax is to reduce the consumption of SSBs and, consequently, sugar intake. According to simulations (Tiboldo et al., 2024), the tax could lead to an average reduction of 18% in SSB consumption and a 24% reduction in sugar consumption.

The tax encourages consumers to switch to diet or low-sugar alternatives, which could have long-term health benefits. However, its effectiveness in promoting product reformulation is limited by its flat rate, which does not provide strong incentives for manufacturers to reduce sugar content below the 25-gram threshold.

European context of sugar taxes

European countries have implemented soda and sugar taxes using two main approaches: volumetric taxes, which apply a fixed tax per liter regardless of sugar content, and sugar content-based taxes, which impose higher rates on beverages with more sugar:

among the countries with volumetric taxes, Belgium (2016) applies a fixed rate per liter, as does Hungary (2011), though Hungary’s tax covers multiple products beyond sugary drinks. Norway (1922, with an increase in 2018) also uses a flat tax per liter on sugary drinks. Poland (2021) primarily follows a volumetric model but includes an additional charge for added sugar content;
in contrast, countries with sugar content-based (two-tier or graduated) taxes apply higher rates to drinks with more sugar. France introduced a volumetric soda tax in 2012 but revised it in 2018 to a tiered system based on sugar levels. The United Kingdom (2018) the Soft Drinks Industry Levy (SDIL), with drinks containing ≥5g sugar/100ml taxed at a lower rate and those with ≥8g sugar/100ml facing a higher tax. Ireland (2018) follows a similar model, taxing drinks in the same two sugar brackets. Portugal (2017) also introduced a two-tier system, while Lithuania (2019) and Latvia (2016) apply sugar concentration-based taxes. Spain’s Catalonia region (2017) taxes drinks with more than 8g sugar/100ml at a higher rate.

Policy implications and recommendations

The Italian sugar tax, while effective in reducing SSBs and sugar consumption, could be improved by adopting a tiered tax structure based on sugar content. This would provide stronger incentives for manufacturers to reformulate their products and reduce sugar levels. Additionally, the tax revenues, estimated at €47 million annually, could be reinvested in health-related program stargeting low-income households and children, making the tax more equitable.

Overweight, obesity and diabetes in Italy

Italy faces significant challenges concerning overweight, obesity, and diabetes rates among both adults and children:

adult overweight and obesity rates. A large study conducted by the Istituto Superiore di Sanità (ISS) on 110,742 subjects surveyed in every Italian region, during 2017-2020, shows that 42.4% of adults in Italy have an excessive body mass index (BMI= weight (kg)/height (m²). In details, 31.6% of the adult population is overweight (BMI 25-29.9), 10.8% have obesity (BMI ≥ 30);
Childhood overweight and obesity rates. Italy reports concerning figures regarding childhood overweight and obesity. Data from over 50,000 children indicate that 20.4% are overweight, 9.4% are obese, and 2.4% are severely obese, based on International Obesity Task Force criteria. These rates are even higher when using WHO growth references. Notably, the Campania region, which includes Naples, has an overweight rate of 43% among children, with 18.6% classified as obese;
Diabetes Prevalence. As of 2023, nearly 6.3% of the population (3.7 millions, out of 58.99 million individuals), in Italy is living with diabetes, with the majority aged 75 years or older. This prevalence underscores the significant public health challenge posed by diabetes in the country.

Conclusion

The Italian sugar tax represents a significant step in the fight against obesity and NCDs. While it is effective in reducing SSBs and sugar consumption, its flat-rate design limits its potential to encourage product reformulation. By learning from the experiences of other countries, Italy could refine its tax policy by using a two-tiered approach (i.e. graduating the tax in proportion to the SSBs sugar content) to maximize its public health benefits.

The above mentioned statistics, nonetheless, highlight the pressing need for comprehensive public health interventions in Italy to address the rising trends of overweight, obesity, and diabetes across all age groups. A more comprehensive approach to nutrition policies ought therefore to include:

an effective and easy-to-understand Front-of-Pack Nutrition Labelling (FOPNL) system, such as Nutri-Score, which is widely adopted in nine European countries and has been demonstrated to be effective and useful by more than 150 scientific studies;
fiscal measures to be extended to all ultra-processed foods with unhealthy nutrition profiles.

Dario Dongo

References

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