Home Blog Sugary Drink Tax: Implications for F&B and FMCG Business Food & Beverages | Indonesia | Product Registration Sugary Drink Tax: Implications for F&B and FMCG Business InCorp Editorial Team 13 March 2025 6 minutes reading time Table of Contents Understanding the Sugary Drink Tax in Indonesia Indonesia’s Sugary Drink Tax Plan International Examples of Sugary Drink Tax Government Regulations & BPOM Compliance for Sugary Beverages Impact of the Sugary Drink Tax on Key Industries Prepare for the Sugary Drink Tax with InCorp The sugary drink tax is a public health policy aimed at reducing sugar consumption and curbing lifestyle-related diseases such as obesity and diabetes. Across the world, governments are increasingly implementing these taxes to discourage excessive sugar intake and generate additional revenue for healthcare systems. In Indonesia, the government has officially announced its plan to tax sugary packaged beverages starting in July 2025. This move is in response to a surge in diabetes and other non-communicable diseases associated with high sugar intake. The tax is expected to significantly impact Food and beverage (F&B) businesses, Fast-Moving Consumer Goods (FMCG) manufacturers, and importers of sweetened packaged drinks. This article explores the implications of the sugary drink tax on these industries, government regulations, and business adaptation strategies. Understanding the Sugary Drink Tax in Indonesia The sugary drink tax is a form of excise tax imposed on beverages containing high levels of added sugar. The primary objectives of this tax include: Encouraging Healthier Consumption Habits: Higher prices discourage excessive sugar consumption. Reducing Healthcare Costs: Lower sugar intake can lead to reduced cases of obesity and diabetes. Increasing Government Revenue: The tax provides additional funds to invest in healthcare programs. Indonesia’s Sugary Drink Tax Plan Indonesia plans to enforce the tax on sugary products in July 2025 as part of a broader strategy to tackle rising diabetes cases. Key details include: Scope of Taxation: The tax applies to packaged sweetened beverages, including carbonated drinks, fruit juices with added sugar, energy drinks, flavored milk, and instant coffee or tea products. Tax Rate: The exact tax rate has yet to be finalized, but it is expected to follow similar structures in other ASEAN countries. Expected Revenue & Impact: The government anticipates increased tax revenue while encouraging consumers to opt for healthier alternatives. International Examples of Sugary Drink Tax Many countries have already implemented sugar taxes with varying degrees of success: Mexico: A 10% sugary drink tax led to a 7.6% decrease in sugary beverage sales within the first two years. United Kingdom: The Soft Drinks Industry Levy (SDIL) resulted in manufacturers reformulating their products to reduce sugar content. Thailand & the Philippines: Both countries adopted similar excise taxes, significantly impacting consumer behavior and product innovation. As Indonesia follows suit, businesses in the F&B and FMCG industries must prepare for regulatory adjustments and market shifts. Government Regulations & BPOM Compliance for Sugary Beverages The Indonesian government has introduced GR No. 28/2024 to regulate the sugar, salt, and fat content of processed foods and beverages. This aims to improve public health by reducing the risk of diabetes and obesity. Limits on Sugar, Salt, and Fat The government will establish maximum sugar, salt, and fat thresholds in processed and ready-to-eat foods. These limits will be set based on health risks and international standards. To continue operating, businesses such as food manufacturers, importers, restaurants, catering services, and food vendors must comply with these limits. Any food product exceeding 50g of sugar, 2,000mg of sodium, or 67g of fat per serving will be considered excessive. Banning Harmful Ingredients Certain ingredients that increase the risk of non-communicable diseases (NCDs) may be restricted or banned in processed foods and beverages. This rule applies to all businesses producing, importing, and distributing these products. More detailed guidelines will be introduced in future ministerial regulations. Possible Excise Tax on High-Sugar Foods The government may introduce an excise tax on processed foods with high sugar content. This will likely lead to higher retail prices, which may push businesses to reformulate products or explore alternative sweeteners to maintain sales and customer demand. Mandatory Nutrition Labels All processed and ready-to-eat foods must include nutrition labels detailing sugar, salt, and fat content. This requirement applies to all producers, importers, and distributors, expanding beyond the previous regulations that only applied to large-scale businesses. Labels must be displayed on packaging or informational media, such as online product descriptions or menus. Advertising & Sales Restrictions Advertisements for high-sugar products will face restrictions, especially when targeting children or vulnerable groups. Additionally, certain high-sugar foods may be banned from being sold in schools, hospitals, and healthcare facilities to protect public health. Promotions and sponsorships for these products may also be regulated to prevent misleading health claims. READ MORE:Packaging Trends and Opportunities in the F&B IndustryWhy Does Food Safety Matter for Indonesian Products?Indonesia’s FMCG Market: Top 15 Companies Impact of the Sugary Drink Tax on Key Industries The sugary drink tax will significantly affect Indonesia’s Food and beverage (F&B) industry, Fast-Moving Consumer Goods (FMCG) sector, and beverage importers and distributors. Businesses must adjust to higher costs, changing consumer preferences, and stricter regulations. Food & Beverage Industry The F&B industry will face higher production costs as companies pay taxes or reformulate products to reduce sugar content. Some businesses may pass the tax burden to consumers, leading to higher retail prices and a possible decline in sugary beverage sales. Restaurants, cafes, and convenience stores may see shifts in consumer demand, with more people choosing lower-sugar options. To remain competitive, businesses must introduce healthier drink alternatives or use natural sweeteners. Fast-Moving Consumer Goods (FMCG) Sector The FMCG sector, including beverage manufacturers and distributors, must adjust its supply chains to comply with new regulations. Companies will also face marketing restrictions, requiring them to change their advertising and promotional strategies. Additionally, the tax will increase retail prices for sweetened packaged drinks, possibly affecting consumer purchasing habits. Businesses must invest in product innovation and regulatory compliance to stay ahead in a changing market. Beverage Importers & Distributors Importers of sweetened packaged beverages will experience higher import duties and stricter regulations. Products must meet BPOM registration requirements, which could delay market entry and increase costs. With local brands reformulating to meet MBDK tax requirements (Minuman Berpemanis Dalam Kemasan), imported sugary drinks may become less competitive. To maintain their market presence, importers must review pricing strategies, ensure regulatory compliance, and consider offering healthier beverage options. Guide to Doing Business in Jakarta Mailchimp Free eBook Indonesia Business Insight Notify Full NameEmail I have read InCorp's Privacy Policy and agree to InCorp using my information provided to contact me about related content, and services.*Subscribe Prepare for the Sugary Drink Tax with InCorp Indonesia’s sugary drink tax is a major regulatory change impacting the F&B and FMCG industries. While the policy aims to promote public health, it also brings challenges like higher production costs, shifting consumer demand, and stricter compliance rules. Businesses must adapt to remain competitive. For businesses needing support with compliance and market entry, InCorp Indonesia (an Ascentium Company) provides expert assistance: Food and Beverage Registration: Helping businesses register F&B products smoothly. Product Registration and Import: Ensuring compliance for imported and locally produced beverages. Navigate these changes efficiently and ensure continued success in Indonesia’s evolving market by completing the form below. Read Full Bio Verified by Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships. Frequently Asked Questions What are the regulations on product distribution in Indonesia? You will need to register your products with the BPOM (National Agency of Food and Drugs) and MoH (Ministry of Health) before you can distribute them in Indonesia. It can only be registered with an Indonesian legal entity. Your local distributor will register your product in Indonesia under their entity and become the license holder if you distribute via the entity you choose. Is halal registration required for all products in Indonesia? Under the latest regulations on Halal Product Assurance, the mandatory requirement for halal certification has been expanded to encompass a wide range of consumer products in Indonesia. This change, which was previously voluntary, now dictates that various items must obtain halal certification. Initially, the certification focus has been on food and beverage products, with the deadline for compliance set for October 17, 2024 What if my product has been registered under a local distributor, and I decide to transfer the license to my company or another distributor? You can transfer the license if your local distributor agrees to change the product license holder. Can you provide pricing examples for the product registration services?v To provide you with accurate pricing information for our product registration services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the service may vary accordingly. For detailed information, please get in touch with our consultants. Get in touch with us. 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