• A soft drinks tax has been introduced in Malaysia.
• Beverage-makers are starting to reformulate to avoid needing to increase their product costs.
• Per capita consumption could reduce in the future as a result.  

Per Capita Sugar Consumption Likely To Fall 

Malaysia’s Annual Sugar Consumption 

• Following the introduction of a soft drink tax in Malaysia on July 1^st, we think sugar consumption will maintain close to 1.7m tonnes per year.
• This means per capita consumption will reduce from 52kg this year to 51kg in 2020.

Malaysia’s Per Capita Sugar Consumption

• The tax is being applied to drinks containing sugar above 5g per 100ml.
• We understand some major drinks manufacturers are starting to reformulate some of their products as a result of the tax.
• However, reformulation can be a lengthy process and so we are not aggressively marking consumption lower for the short term.
• Sugar-containing beverages are a major source of sugar consumption in Malaysia.

The Malaysian Soft Drinks Tax  

• A tax of MYR0.40 per litre is being levied on carbonated drinks with a sugar content above 5g/100ml, and fruit drinks with a sugar content above 12g/100ml. 

Beverage cost in Malaysia; Post sugar-tax 

• It will be levied on food and beverage manufacturers, and so costs are likely to be passed on to consumers.
• This is a similar model to that applied in the UK, where many manufacturers reformulated drinks with other sweeteners to avoid needing to increase drinks prices.
• However, it’s still not clear if the price differential between taxed and untaxed soft drinks will be enough to change Malaysian consumer behaviour.