WHO calls for steep taxes on alcohol and sugary drinks globally by 2035

The World Health Organization (WHO) is calling on countries to raise prices on tobacco, alcohol, and sugary drinks by at least 50% by 2035 through targeted health taxes, aiming to curb chronic diseases and generate much-needed public revenue. The announcement comes as major beverage companies like Constellation Brands, the U.S. distributor of Modelo beer, are already feeling the pinch from shifting consumer behavior and economic worries.

WHO launches “3 by 35” health tax initiative

WHO’s new “3 by 35” Initiative aims to cut consumption of products fueling the global noncommunicable disease (NCD) epidemic, which includes heart disease, cancer, and diabetes. NCDs now account for over 75% of deaths worldwide. WHO says a one-time 50% price increase on tobacco, alcohol, and sugary drinks could prevent 50 million premature deaths over the next 50 years while raising $1 trillion in public revenue over the next decade.

The initiative urges countries to implement or increase excise taxes on these products, reduce their affordability, and reinvest revenues into health systems, education, and social protection. Between 2012 and 2022, nearly 140 countries raised tobacco taxes significantly, showing that large-scale change is achievable, WHO noted.

Taxes and tightening wallets could reshape the beverage market

WHO’s call for higher health taxes arrives at a time when alcohol companies are grappling with both shifting consumer preferences and economic unease. As countries consider raising taxes on alcohol and sugary drinks to improve public health and shore up revenue, beverage makers may face even greater pressure in the coming years.

Constellation Brands reported this week that net sales fell 5.5% to $2.52 billion in the latest quarter, as its beer division saw a 1.7% decline and its wine and spirits business slumped 28%. The company attributed lower beer sales to “socioeconomic headwinds,” including customers spending less on social gatherings both at home and in public. Profit fell 41% to $516.1 million, driven by lower sales and higher expenses.

Executives also pointed to heightened consumer concerns about the broader economy and personal finances, particularly among Hispanic customers, who make up a large share of Modelo drinkers. In its April earnings call, Constellation’s CEO cited immigration concerns as one factor impacting spending patterns within this group.

WHO argues that smarter health taxes not only discourage consumption of harmful products but also help fund universal health coverage and essential development programs, creating what it calls a “win-win” for global public health and economic stability.