The average price paid for soft drinks has increased in Portugal since the introduction of the sugar tax in 2017, a new study has found.
The study was published by the Office of Strategy and Study of Portugal’s Ministry of Economy and carried out by the Nova School of Business and Economics, reports Jornal de Noticias.
Price Increases
The analysis divided beverages in four categories: those with high sugar content (more than 80 grams/litre); with average sugar content (nearly the 80 grams/litre limit); with low sugar content (less than 70 grams/litre) and zero sugar.
In the case of high-sugar soft drinks (such as Coca-Cola and Red Bull), the study found that producers passed on the cost of the new tax almost entirely to consumers, with a price hike of around €0.16/litre.
For beverages that changed the formula to lower the sugar content below the 80 grams/litre limit (such as Fanta and 7Up), the price on average increased by €0.15.
In addition, for low-sugar beverages, prices also increased on average by between €0.15 and €0.16/litre.
Tax Rate
The Portuguese Government introduced the sugar tax in February 2017, initially setting the amount at €0.16/litre (plus VAT) for beverages with over 80 grams of sugar and €0.08/litre (plus VAT) for those with a lower sugar value. The amounts were updated this year.
According to the study, the price increases across the board may partly be due to the additional costs related to product reformulation, repackaging and brand repositioning. Also, the sugar tax was reported to have had a negligible impact on consumption, with no major changes in demand for most soft drinks.
The study analysed the evolution in price and sales at more than 400 stores across the country between February 2015 and January 2018.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Branislav Pekic. Click subscribe to sign up to ESM: The European Supermarket Magazine
