Sweet Drink Tax Repeal Fails to Lower Prices or Restore Consumption Levels

A recent study by the Tax Authority's Planning and Economics Division reveals that despite the 2023 repeal of the excise tax on sweetened beverages, prices have not returned to their previous levels, and consumption remains suppressed. The research shows that while the tax was removed, the majority of sweetened drink prices stayed elevated, and consumption volumes have not rebounded to pre-tax figures.

Data indicates that in 2022, consumption of taxed beverages dropped by approximately 11.8%, from 370.2 million liters to 326.3 million liters. After the tax repeal, consumption increased by about 5.1%, yet it remained around 6% lower than 2021 levels during the period from April 2024 to March 2025. The decline was more pronounced in the Haredi sector, where consumption fell by 20.2% following the tax introduction and rose by 12.2% after its removal, but still stayed 9% below 2021 figures.

The tax generated roughly 900 million shekels in revenue for the state in 2022. Adjusted for inflation and price increases, had the tax remained in effect in 2025, it would have yielded about 1.05 billion shekels annually. The findings highlight persistent high prices and altered consumption habits despite the tax repeal, suggesting lasting effects on the market and consumer behavior.