Media release

From: George Institute for Global Health

Food taxes and subsidies could transform Australians' diets, study shows

Food taxes and subsidies that make healthy foods cheaper and ultra-processed foods more expensive could significantly improve Australian diets and help reduce chronic disease, according to a new study by The George Institute for Global Health, published in Nature Food.¹

Poor diets (with excessive consumption of foods high in added salt and sugar, and insufficient healthy foods including fresh fruits and vegetables, whole grains, nuts and seeds), are linked to one in five premature deaths globally, with most attributable to cardiovascular disease, cancer, and type 2 diabetes. Fiscal policies such as taxes on sugary drinks and subsidies for fresh produce are among the World Health Organization’s recommended tools to combat diet-related disease, in line with evidence showing they are effective.²

To assess how Australian consumers’ food choices change in relation to price, the researchers analysed grocery purchasing patterns from 10,000 households over five years.

They found that lowering the price of fresh fruit and vegetables by 20% boosts purchasing by up to 20%, while raising the price of sugary drinks by 20% cuts purchasing by 24%. These effects were consistent across socio-economic groups, showing the broad impact of pricing on diet choices and providing guidance to policymakers looking to improve dietary choices to reduce the burden of chronic disease.

“Amid a cost-of-living crisis, our diets are getting worse, with fewer than 5 per cent of us eating the recommended daily amount of fruit and vegetables,” said lead author Tazman Davies, research associate at The George Institute and UNSW Sydney. “Ours is the largest study of its kind and the first to analyse the relationship between price and purchasing behaviour across different food and drink categories.

“The federal government has been subsidising fresh produce in 76 highly remote stores, and based on our research, we would expect to see that initiative significantly improve diets in these communities,” he said.

“Expanding such programs to other high-need areas, not just remote locations, could yield further health benefits at a population level by incentivising healthier eating patterns.

“It might seem obvious that people are much more likely to buy healthy food when it’s affordable and consume fewer unhealthy foods when prices increase, but for governments, both in Australia and in comparable markets, to design and implement effective policies, this information is essential."

More than 100 countries have implemented levies on sugary drinks, and evidence shows they’re an effective way to lower sugar consumption; “Introducing a similar measure here could simultaneously generate revenue to fund subsidies for nutritious foods,” Tazman said.

About the study

The George Institute analysed five years (January 2015 - December 2019) of household food purchasing data held in the NielsenIQ Homescan Dataset. A panel of approximately 10,000 households in each year who recorded all packaged and unpackaged foods purchased from supermarkets, convenience stores, and grocers) to consume at home. The sample is broadly representative of the geographic distribution, income levels, and household size of the Australian population. No data was collected on foods and drinks purchased to eat outside the home from restaurants and cafes, or take-away meals. January - March 2019 was the base quarter and adjusted prices were adjusted in other quarters using the Consumer Price Index for Foods to account for inflation.

The George Institute for Global Health

At The George Institute, we believe everyone has the right to a healthy life. With major centres in Australia, the UK and India, and over 400 active projects in 60 countries, we work with partners and communities across the world to conduct rigorous, high-quality research to drive meaningful improvements in health, especially for those facing the greatest barriers. From pioneering clinical trials to transformative digital health innovations, translating evidence into scalable solutions, shaping health policies and advocating for change, we’re focused on a future where health equity is a reality, not just an aspiration. At the heart of our mission to improve the health of millions worldwide is a belief in the power of change. Together, we’re building a healthier, more just world. Visit: www.georgeinstitute.org

References:

1. Davies, T., Saxena, A., Wu, J.H.Y. et al. Food price elasticity estimates in Australia. Nat Food (2025). https://doi.org/10.1038/s43016-025-01184-1
2. Obesity Evidence Hub. Price policies for food and beverages. Accessed July 2025