Trends & Reports03/01/2026

Vietnam Sugar Tax 2027: 8% Excise on Sugary Drinks — F&B Impact & Menu Strategy

New 8% tax (rising to 10% in 2028) hits drinks >5g sugar/100ml. Exact pricing math, menu reformulation playbook, and margin protection for cafes, bubble tea, and restaurants.

8% Tax rate from 2027(Rises to 10% from 2028)>5g/100ml Sugar threshold(Per Vietnamese Standard)Milk, pure juice, coconut water Key exemptions(Under current regulations)$2.1B Vietnam beverage market(2024 market size)

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Vietnam's National Assembly has passed a new Special Consumption Tax (SCT) law effective January 1, 2026, introducing a phased excise tax on sugar-sweetened beverages. The tax rates are set at 8% from 2027 and 10% from 2028. While 2026 is a preparation year with no tax collection yet, F&B operators who sell sweetened drinks — from bubble tea shops to restaurants offering soft drinks — need to understand this now. The tax hits manufacturers and importers first, but the cost will flow downstream to every café and restaurant that buys sweetened ingredients at the wholesale level.

Key numbers at a glance

Tax rate (2027)

Applied to manufacturing/import price of drinks with >5g sugar per 100ml. Rises to 10% in 2028.

5g/100ml

Sugar threshold

A typical 500ml bubble tea contains 40–60g of sugar — far exceeding the threshold. Even "less sweet" versions often qualify.

+23.7%

Beverage inventory

Unsold beverage inventory rose 23.7% in late 2024 vs. 2023 — the sector was already under pressure before the new tax.

-9.2%

Sector output decline

Beer and soft drink production fell 9.2% in 2024. The new tax adds further headwinds to a market still recovering.

The most common misconception among small F&B operators is: "This tax targets manufacturers, not my shop." That logic is flawed. When manufacturers face higher production costs, they pass them on through higher wholesale prices. If you buy bottled soft drinks, ready-made syrups, or pre-sweetened beverage bases, your input costs will rise — even if you never fill out a tax form yourself. The tax is indirect but real, and it will compress margins for operators who fail to plan.

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Which products are taxed vs. exempt?

Carbonated soft drinks (Coke, Pepsi, 7-Up)TaxedApprox. 10g sugar/100ml — well above threshold

Energy drinks (Red Bull, Sting, Monster)TaxedHigh sugar + caffeine content — clearly taxed

Packaged milk tea (Suntory, V-Fresh)TaxedMost commercial brands exceed 10g/100ml

100% natural fruit juice (no added sugar)ExemptUnder current regulations — definition may tighten

Fresh milk and pure dairy productsExemptMilk and dairy products explicitly excluded

Pure coconut water (no added sugar)ExemptMust be unprocessed or minimally processed

Pre-sweetened tea in industrial packagingTaxedIf >5g/100ml when served, qualifies for SCT

Commercial syrups (Monin, Torani, local brands)Verify with supplierClassification depends on product format — confirm with your supplier

Estimated cost impact (bubble tea shop, 100 drinks/day)

Current monthly syrup/sweetener costVND 4–8MAssuming 50% of orders use commercial sweet syrups

Additional cost at 8% tax (from 2027)+VND 320K–640K/moManufacturer passes tax to wholesale price

Additional cost at 10% tax (from 2028)+VND 400K–800K/moImpact grows with higher tax rate

Cumulative annual cost increaseVND 3.8M–9.6MNot negligible for a small operator

Required price adjustment to maintain marginVND 1,000–2,000/drinkOr reduce sugar-based ingredients in recipe

5 actions to take in 2026 (before tax kicks in)

>Audit your ingredient list: Identify every sweetened product you purchase commercially. Ask each supplier whether their products will be subject to SCT from 2027. Do not wait for a price increase notice — ask proactively.
>Recalculate unit economics with a 5–10% ingredient cost increase: For each menu item, model the impact of higher input costs on your gross margin. Determine which items are most exposed and where you have pricing flexibility.
>Gradually introduce low-sugar and unsweetened options: This hedges both against the tax and the broader consumer trend toward healthier beverages. Customers in Vietnam are increasingly ordering "less sweet" — this is both good policy alignment and good business.
>Consider switching from commercial syrups to fresh ingredients: Fresh fruit, natural sweeteners (honey, coconut sugar), and house-made syrups are not subject to the same industrial classification — and they support a "clean label" positioning that commands higher prices.
>Plan price adjustments for late 2026, not early 2027: Announce any menu repricing before the tax takes effect. Customers adapt better when price changes are gradual and communicated in advance. A sudden VND 2,000–3,000 increase at the same time as news about "sugar taxes" will generate more negative reaction.

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Key considerations

Tax is on manufacturers — but operators absorb it too

The tax is collected upstream, but wholesale prices will rise. Every operator buying commercial sweetened ingredients will see higher costs. This is not theoretical — it's standard pass-through economics.

In-house syrups made fresh on-premises may be exempt

If you cook your own sugar syrup from raw cane sugar (not industrial packaging), it likely falls outside the SCT classification. This is an advantage for artisan shops over bubble tea chains using factory-made bases.

Monitor implementing regulations — details still being finalized

The law is passed but detailed ministerial circulars are still being issued. The exact product list and classification criteria may shift. Follow updates from the Ministry of Finance and Vietnam Chamber of Commerce (VCCI).

Strategic opportunity: reposition as a "low-sugar" brand

The tax creates a market signal. Shops that proactively shift to lower-sugar menus will align with regulatory direction, consumer health trends, and potentially command premium prices for "natural" products.

The sugar tax is not an existential threat to Vietnam's F&B sector, but it will separate operators who plan ahead from those who react too late. With 2026 as your runway, there is time to renegotiate supplier terms, test lower-sugar recipes, and adjust pricing gradually. Use Validator.vn to model your financials with a 5–10% increase in ingredient costs — see how your break-even point shifts and what adjustments will protect your margins in the years ahead.

Vietnam Sugar Tax — Frequently Asked Questions

›When does Vietnam start taxing sugary drinks?

Vietnam's Special Consumption Tax (SCT) on sugary drinks >5g sugar/100ml takes effect from January 1, 2027 at 8%, rising to 10% from 2028. The law was passed in 2025, with 2026 as the preparation year (no tax collected yet, but regulations already in force). It applies to bottled carbonated drinks, bottled bubble tea, energy drinks (Sting, Red Bull), and other packaged beverages with sugar >5g/100ml.

›What is the sugar tax rate in Vietnam?

The tax rate is 8% in 2027, rising to 10% in 2028. Applied to the factory price (or import price) of beverages containing more than 5g of sugar per 100ml (per Vietnamese Standard TCVN). This is on top of the standard 10% VAT. Manufacturers will pass the tax through to wholesale prices, so F&B operators should expect ingredient costs to rise 5-10% from 2027.

›Which drinks are exempt from Vietnam's sugar tax?

Exemptions include: (1) Fresh milk and dairy products; (2) 100% natural fruit juices (no added sugar); (3) Pure coconut water; (4) Mineral and purified water; (5) Any beverage with less than 5g sugar/100ml. This creates an opportunity for F&B shops to pivot toward healthy drinks — both avoiding the tax and capturing the growing consumer preference for lower-sugar options in Vietnam.

›Do Coca-Cola, Pepsi, Sprite get taxed?

Yes. Coca-Cola (~10.6g/100ml), Pepsi (~11g), Sprite (~9g), Fanta, and Schweppes Tonic all far exceed the 5g/100ml threshold. From 2027 they face 8% SCT (rising to 10% in 2028) on top of the standard 10% VAT. Manufacturers will pass this through, so cafes/restaurants buying these drinks wholesale should expect 8-10% higher prices from 2027.

›How does the sugar tax affect bubble tea shops?

Bubble tea prepared on-premise (not industrially bottled) is NOT directly taxed. However: (1) Industrial syrups, packaged tapioca pearls, and liquid creamers with sugar >5g/100ml WILL be taxed → ingredient costs up 5-8%; (2) Bottled tea products sold alongside are taxed. Expect a typical bubble tea shop to see ingredient costs rise 3-6% from 2027, requiring price adjustments of 1,000-2,000 VND per cup to preserve margins.

›What is the sugar threshold that triggers the tax?

The threshold is >5g of sugar per 100ml (measured per Vietnamese Standard TCVN). Example: a 500ml drink containing more than 25g of sugar is taxed. Most carbonated soft drinks (Coca 10.6g, Pepsi 11g, Sprite 9g), bottled bubble tea (40-60g per 500ml), and energy drinks (8-12g) far exceed this threshold. Low-sugar drinks below 5g/100ml (some flavored water, lightly-sweetened tea) are not taxed.

›Who pays Vietnam's sugar tax — seller or buyer?

Legally, the SCT is collected from manufacturers/importers at the factory/import stage. In practice, however, the tax is passed through the supply chain: suppliers raise wholesale prices → F&B operators pay more → end consumers ultimately absorb the higher retail price. So while F&B businesses do not file SCT returns themselves, they bear the tax indirectly through higher ingredient costs. The end consumer is the effective payer.

›What should F&B businesses do to prepare before 2027?

5-step checklist for 2026: (1) Audit all beverage ingredients — identify which will be taxed; (2) Recalculate cost-of-goods assuming 8-10% supplier price increases from 2027; (3) Add low-sugar/no-sugar options to menu to reduce dependence on taxed ingredients; (4) Replace industrial syrups with fresh alternatives (fresh fruit, honey, palm sugar); (5) Plan gradual price increases from late 2026 rather than sudden hikes when the tax hits — customers need time to adjust.

›Does Vietnam's sugar tax apply to drinks made in the cafe?

No — drinks prepared on-site (bubble tea, coffee, smoothies) are NOT directly subject to SCT. The tax only applies to bottled/canned drinks produced industrially. However, cafes still feel the impact indirectly: industrial ingredients they buy (syrups, bottled tea, liquid creamer with sugar >5g/100ml) will be taxed, raising ingredient costs 5-10%. Plan a menu review and price adjustment strategy for late 2026.

›Which Vietnam sugar tax rate applies to energy drinks?

Energy drinks (Sting, Red Bull, Number 1, Wake-Up 247, etc.) typically contain 8-12g sugar per 100ml and often include caffeine — both criteria for SCT. From 2027 they face 8% SCT, rising to 10% in 2028, on top of standard 10% VAT. F&B operators selling energy drinks should expect cost of goods to rise ~10% from 2027 and factor this into 2027 pricing decisions now.

›Is Vietnam the only country with a sugar tax?

No — Vietnam joins about 50 countries worldwide that have implemented some form of sugar-sweetened beverage (SSB) tax. Notable examples: UK (from 2018, up to 24p/liter), Mexico (10% since 2014), Philippines (6-12 pesos/liter since 2018), Thailand (since 2017, tiered by sugar content), South Africa (2018). The stated goal is to reduce sugar consumption and combat obesity, with tax revenue often earmarked for public health programs.

›What are the F&B industry's options to reduce sugar tax impact?

4 strategic responses: (1) Reformulate — reduce sugar content in industrial products below 5g/100ml to avoid the tax entirely (many international brands did this in the UK); (2) Pivot menu — shift toward exempt categories (fresh juices, milk-based, coconut water); (3) Absorb the cost — for premium brands with pricing power, keep prices stable and let margins compress slightly; (4) Pass-through — raise prices 3-5% and communicate the reason clearly to customers. Most operators will use a mix depending on category.

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