UAE’s New Sugar Tax Already Reshaping Beverage Shopping Habits
The United Arab Emirates’ revamped sugar tax system, effective from January 1, 2026, is rapidly influencing consumer behavior, with demand shifting away from high-sugar drinks toward low-sugar and zero-sugar alternatives. Retailers and industry experts report that the tiered excise tax is prompting both shoppers and manufacturers to reconsider their choices and strategies.
How the New Tax Works
Implemented by the UAE Federal Tax Authority (FTA), the new regime taxes beverages based on their sugar content per 100ml, replacing the previous flat 50% excise tax. The tiered structure is as follows:
Exempt: Drinks with less than 5g of added sugar per 100ml, or containing only natural sugars/artificial sweeteners.
Moderate tax: Beverages with 5g to less than 8g of sugar per 100ml.
Higher tax: Drinks with 8g or more of sugar per 100ml.
This model aims to encourage healthier choices and product reformulation by making lower-sugar options more affordable.
Impact on Consumer Behavior
Retailers like the Adil Group of Supermarkets and Spinneys Dubai have observed immediate changes:
Sales of high-sugar drinks have slowed, with customers noticing higher prices.
Low-sugar and zero-sugar alternatives are gaining popularity, driven by both health awareness and cost savings.
Price differentiation at checkout now clearly favors healthier options, reversing previous pricing trends.
Public Health Goals
The tax aligns with the UAE’s efforts to combat rising rates of obesity, diabetes, and other non-communicable diseases. By incentivizing reduced sugar consumption, policymakers aim to nudge consumers toward healthier choices while encouraging manufacturers to reformulate products.
Industry Response and Innovation
The tiered system is viewed as more nuanced and fair than the previous flat tax. It rewards brands that lower sugar content, allowing them to benefit from reduced tax liabilities and competitive pricing. As a result, many beverage companies are:
Reformulating products to fall into lower tax brackets.
Expanding offerings of low-calorie and sugar-free options.
Focusing on innovation to meet growing consumer demand for healthier alternatives.
Also Read: Viral Video of UAE President & VP’s Heartfelt Exchange Captures Nation’s Attention
Long-Term Outlook
Experts predict a sustained shift toward healthier beverage choices as the tax continues to influence both supply and demand. This policy is expected to not only reduce excessive sugar intake but also drive ongoing product innovation and improved public health outcomes in the UAE.
By creating a clear financial incentive for healthier consumption, the UAE’s sugar tax represents a progressive step in promoting wellness and reshaping the beverage market for the better.
