Nutritional Drink Tax Or Nutrition Label To Suppress Sugar Consumption, Which Is Effective?

JAKARTA - The EU-ASEAN Business Council recommends that Indonesia implement labeling standards in the food and beverage industry rather than impose taxes or excise taxes.

The harmonization of labeling standards is considered to help consumers make healthier choices while reducing trade barriers.

Currently, labeling regulations in ASEAN are still varied, such as Nutri-Grade in Singapore and Healthier Choice in Indonesia, Malaysia, and Brunei, which make it difficult for producers to market products regionally.

A fiscal approach such as a sweetened drink tax (SSB tax) is considered less effective and has the potential to burden low-income groups.

Previously, the Director of Communication and Guidance for Service Users of the Directorate General of Customs and Excise (DJBC) of the Ministry of Finance (Kemenkeu), Nirwala Dwi Heryanto, said that Presidential Decree (Keppres) Number 4 of 2025 had actually provided space to draft government regulations, including the MBDK.

However, Nirwala emphasized that his party did not want to be careless.

"Of course, the problem of implementing (the MBDK) of all kinds will talk about the economic situation. There are many considerations, not merely the target of acceptance (excitement). You have to talk about what the economic conditions are updated like," he said.

He detailed several economic considerations, including people's purchasing power and the condition of the food and beverage industry (mamin).

Nirwala emphasized that DJBC must ensure that this aspect is safely under control, before implementing MBDK excise.

Economic Observer of the Pancasetia College of Economics, Ros Nirwana, stated that a more stringent nutritional labeling system can have various impacts on foreign investors, depending on their type and investment goals.

Foreign investors who are committed to health and sustainability may be interested in this regulation.

"Foreign investors can also see a stricter nutritional labeling system as an opportunity to invest in a healthier food and beverage industry," said Ros.

However, he also stressed that this policy could increase compliance and regulatory costs for foreign investors. They may have to spend additional costs to meet stricter nutritional labeling standards, which could affect their profitability.

"The positive and negative impacts of this policy rely heavily on various factors, such as industrial types, company sizes, and business adaptability to new regulations," added Ros.

In addition to the nutritional labeling system, Ros also discussed excise policies as an instrument for controlling sugar consumption.

The excise policy requires producers to pay additional taxes on products that contain sugar with the aim of reducing consumption through price increases.

However, he also highlighted the issue of excise policy. According to him, excise duty can increase the cost of living for consumers.

In addition, it can affect the competitiveness of producers in the market. Mix, excise can also potentially pose a risk of smuggling and counterfeiting products.

"The main risk of the excise policy is increasing the cost of living for consumers. In addition, there is a negative impact on the competitiveness of producers," he said.

Meanwhile, in terms of food and beverage industry players (mamine) also rejected the discourse on the imposition of sweetened beverage excise which will be enforced by the Indonesian government.

The new excise could have a negative impact on industry and overall national economic growth, which is down.

Head of Strategic Marketing Nutrifood Susana believes that the implementation of excisable goods on packaged sweetened drinks (MBDK) will have a separate impact on the industry.

"With the imposition of excise, it will automatically make product prices higher and ultimately have an overall impact on the industry. If prices go up, consumers are affected, if consumers are affected, sales can go down. It could have a negative impact on the industry, the overall economy as well," said Susana.

According to the government, the imposition of excise on MBDK is intended to control excessive sugar consumption and/or sweeteners, as well as to encourage the industry to reformulate low- sugar MBDK products.

He revealed that as an industry actor, his party also hopes to be involved by the government in determining the technical imposition of excise later.

"Industrial actors want to be involved in determining the technicalities if the government will apply excise duty on packaged sweetened drinks or MBDK. Among them is related to determining the limits on sugar levels to the details of the regulations that will be applied. Here, do we need to know, the purpose of this MBDK excise duty is to reduce PTM (uncommunicable disease) is that true or not? Is there relevance?" he said.

"So, in our opinion, the implementation of MBDK excise will not cure diseases, will not solve and achieve the goal of reducing PTM. If we look, the MBDK excise should not be attached there and not enforced for industry," he said.