New South African soda tax could hurt U.S. beverage exports: USDA

NEW YORK (Reuters) - South Africa will start to tax sugary drinks next year, which could have an impact on $5 million worth of U.S. beverage exports, the U.S. Department of Agriculture said on Wednesday.

South Africa is the latest country to have slapped taxes on sugar-sweetened drinks in a bid to reduce consumption and slow an increase in health epidemics such as diabetes and obesity.

The South African government said on Dec. 15 that it will start to collect a levy of 2.1 cents per gram of sugar on drinks where sugar content is above 4 grams per 100 milliliters in April 2018, the USDA said in a report on its website dated Dec. 22. The tax excludes 100-percent fruit juices, the USDA said:

Thailand moved ahead with a tax in September. Mexico introduced one in 2014, and the United Kingdom is rolling out a similar levy. A handful of U.S. regions introduced them in 2016, but big soda manufacturers scored a victory when Chicago’s home county voted for repeal.

The taxes are a headache for drinks manufacturers such as Coca-Cola Co, Dr Pepper Snapple Group Inc and PepsiCo Inc that are struggling to diversify their businesses into healthier foods and drinks as they face declining consumption of their core products.

The beverage industry has lobbied heavily against the taxes, saying it would hurt jobs and that sugar taxes do not work. But public health advocates, including the World Health Organization, have pushed for the taxes as obesity and diabetes problems arise worldwide.

Reporting by Chris Prentice; editing by Grant McCool