Campaigners hail tax on sugary drinks as businesses weigh possible impact

 

By Kimone Witter   

 

 

Executive Director of the Heart Foundation of Jamaica, Deborah Chen, has labelled the impending special consumption tax (SCT) on sugary drinks as a long overdue win for campaigners against the products.

 

The Foundation and its partners have been campaigning for a tax on sugary drinks, most notably through the 'Are You Drinking Youself Sick?' campaign.

 

Pointing to results overseas, Ms. Chen told The Gleaner that an increase in tax on sugary drinks has led to a reduction in the consumption.

 

She has urged manufacturers to shift to drinks that have less or no sugar.

 

The government says the levy captures drinks with added sugar or artificial/non-nutritive sweeteners, whether locally produced or imported, and is projected to raise $10.1 billion in its first year.

 

Presenting the 2026-27 revenue package in Parliament on Thursday, Finance Minister Fayval Williams said the tax serves broader public health objectives in a country grappling with obesity and diabetes.

 

However, Economist Mikol Mortley says this levy could be the most effective tax measure, that is essentially a tax on the poor.

 

"Because sodas, for example, are heavily imbibed source of sustenance. Then if somebody is drinking, let's say, five sodas a week, that's an additional $50 in taxes per week, if it's a 500 millilitre bottle. But we know how our business owners are. So you increase the tax by $10, you're not going to expect a $10 increase in the cost of the product; it probably might have a $15 increase or in some instances, a $20 increase. So from that perspective, that one is probably going to be the most effective tax measure. But for the persons that do drink a lot of sweet drinks, that one is where it's going to hit a lot of people," said Mr. Mortley, who was speaking Thursday on Radio Jamaica's Beyond the Headlines. 

 

The Wisynco Group, Jamaica's leading manufacturer of sweetened drinks, has said the special consumption tax is a vigorous attack on a particular industry.

 

Group chairman William Mahfood has stressed that this will only deprive poor people of money to spend on other items such as food, therefore the argument that the most vulnerable will not be affected is flawed.

 

He said greater clarity is needed on how the tax will be applied.

 

Meanwhile, Richard Coe, Vice President of the Jamaica Manufacturers and Exporters Association (JMEA), said the affected businesses are crunching the numbers to determine the likely impact of the impending taxes.

 

Alongside sugary drinks, the government says special consumption tax will be applied on pure alcohol, to increase from $1,230 to $1,400 per litre of pure alcohol, and cigarettes to rise by $3 per stick to $20, both effective May 1, 2026. 

 

These changes are projected to generate $1.6 billion and $1.1 billion, respectively.

 

Speaking Friday on the Morning Agenda on Power 106, Mr. Coe said the businesses will seek to ensure that any change in the costs for their products will be minimal. 

 

"Our immediate concern is how our prices will affect consumers and their consumption of our products. And so we are crunching the numbers to see where our prices will land. So it's early days. We don't have all the information that we will need to make our calculations. But the general sentiment coming from the JMEA is that while it is a bitter pill, there's enough sweetener in it to make these tax increases palatable. And we will do as an organisation and a sector, we will do everything in our power to absorb what costs we can so that we're not negatively impacting our consumers," he promised.