🏛️ Spotlight on the economic impact of Portugal’s soft drinks sector at the Portuguese Parliament in Lisbon.
A few days ago, our Portuguese member association PROBEB discussed with policymakers, industry representatives, and other key stakeholders the recent independent study by the Porto Business School on the economic impact of the Portuguese soft drinks sector.
As noted by Filipe Grilo, Head of Applied Research at the Porto Business School, the study provided a better understanding of the importance of the Portuguese soft drinks sector to the country’s competitiveness, showing how the sector had to reinvent itself in response to multiple challenges, including the soft drinks tax, to remain competitive.
📉 The study also demonstrated that the soft drinks tax has caused structural losses of more than €1.4 billion in the Portuguese economy since its introduction in 2017, including:
🔻 €434 million in gross value added
🔻 €186 million in wages
🔻 €141 million in tax revenue
🔻 1,156 jobs
It concludes that future public policies should aim to balance health objectives with economic competitiveness, regulatory stability and incentives for innovation, while avoiding measures that create significant negative effects across integrated industrial value chains.
💬 Márcio Cruz, President of PROBEB, stated:
“Public policies must be assessed based on their outcomes. When a fiscal measure is associated with cumulative losses of €1.4 billion, more than a thousand jobs, and even a reduction in net public revenue, it is legitimate to ask whether the current model should be reassessed. The sector is available to work towards a balanced solution that reconciles public health with competitiveness and regulatory stability.
Portugal needs effective policies and regulatory and fiscal stability for industrial sectors that invest, innovate and employ thousands of people’’.
⚠️ The Portuguese soft drinks tax is failing to achieve the health objective it was intended to deliver and is also harming the competitiveness of the sector. According to Eurostat, obesity rates in Portugal remain high: 15.7% in 2017 and 15.8% in 2022.
This makes it clear that taxation is not the solution. Instead, it is the voluntary actions taken by the Portuguese soft drinks sector that are working. The sector achieved:
👏 a 51.3% reduction in calorie content between 2013 and 2023
👏 a 25.7% reduction in average sugar between 2018 and 2023, under the protocol signed with the Ministry of Health, which far exceeds the set 10% reduction target in average sugar content