A proposal to impose a sugar levy that would add approximately 150 won to the price of a bottle of cola has been put forward. The scheme would charge more for higher sugar content, raising the prospect of price increases for sugar-sweetened beverages.
Park Eun-cheol, a professor at Yonsei University's Institute of Health Policy and Management, presented the plan at a policy forum on sugar-sweetened beverage levies co-hosted by the National Research Council for Economics, Humanities and Social Sciences, the Korea Rural Economic Institute and the Korea Institute of Public Finance on Wednesday. The proposal calls for a three-tier levy based on sugar content.
The core of the plan is a three-tier volume-based tax structure determined by sugar content. Beverages containing 5 grams or more but less than 8 grams of sugar per 100 milliliters would be charged 225 won per liter, while those with 8 grams or more would face 300 won per liter. Products with less than 5 grams per 100 milliliters would be exempt. Under this framework, major carbonated and energy drinks including Coca-Cola, Chilsung Cider and Red Bull are expected to fall into the highest tier at 300 won per liter.
A 250-milliliter can containing 27 grams of sugar would carry a levy of approximately 75 won, while a 500-milliliter PET bottle would incur about 150 won. Given that convenience store prices stand at 1,700 won for a 250-milliliter can and 2,300 to 2,400 won for a 500-milliliter bottle, price increases are highly likely.
The model mirrors the United Kingdom's Soft Drinks Industry Levy. Since the UK introduced the levy in 2018, sugar intake from sweetened beverages has fallen from 15.5 grams to 10.8 grams. Based on these figures, the estimated total levy revenue in Korea would amount to approximately 227.6 billion won.
The policy aims to curb consumption of sugar-sweetened beverages and prevent obesity. Korea's daily sugar supply stands at 140 grams, 2.8 to 5.6 times the recommended level, and continues to rise each year. Sugar intake from sweetened beverages is highest among those aged 10 to 18.
A volume-based tax is emerging as the preferred approach. Choi Sung-eun, head of the Fiscal Projection Center at the Korea Institute of Public Finance, noted that a majority of OECD countries have adopted volume-based taxes levied on sugar content rather than price. The analysis suggests that volume-based taxation is more effective than ad valorem taxes for discouraging specific consumption and aligns better with the policy objective of targeting sugar content.
Debate over the proposal continues, however. A consumer survey found opinion evenly split, with 38.3 percent in favor and 40.0 percent opposed. Some 68.8 percent of respondents expressed concern about a "balloon effect," in which consumers shift to other sugar-laden foods not covered by the levy.
Questions about effectiveness have also been raised. Park Sung-jin, a research fellow at the Korea Rural Economic Institute, said, "A price increase of at least 10 to 20 percent is needed to induce changes in consumption."
Industry and consumer groups are also divided. The food industry maintains that price increases would be unavoidable if the levy is introduced. Consumer groups, meanwhile, stressed that "the policy goal should be changing consumption behavior and encouraging companies to reduce sugar content, not securing tax revenue."