Israel's Sugar Tax Pushed Prices Up 32%. Cancelling It Only Brought Them Down 16%. Three Years Later, Israelis Still Drink Less Soda — We Checked What the Same Bottle Costs Today

By מערכת סופרקליר · 2026-08-16 · 4 min read

2x — How much the price of an identical 1.5-liter bottle of regular Coca-Cola — same barcode — varies between chains: from ₪7.90 at Keshet Ta'amim to ₪15.90 at Yeilo — Superclear data, August 16, 2026, excluding VAT-free Eilat

On January 1, 2022, Israel's previous government imposed a purchase tax on sweetened beverages — one shekel per liter, more for concentrates — meant to curb sugar consumption and the illnesses that come with it. A year later it was cancelled. Three years after that cancellation, the Tax Authority checked what actually happened to consumption and price — and the answer doesn't flatter either side of the argument.

What happened: a tax imposed for health, cancelled for coalition math

According to Ynet, Finance Minister Bezalel Smotrich cancelled the tax in March 2023 under direct pressure from Shas and United Torah Judaism, who demanded he keep a coalition promise to scrap what Shas chairman Aryeh Deri called "the Liberman decrees" — Deri described the original tax as a "political tax" aimed at the Haredi public. The cancellation wasn't a one-time act: per Calcalist, in December 2023, after the Finance Ministry had already published a draft order to reinstate the tax, it reversed course within two days as part of a deal with Deri — extending the exemption in return for Shas dropping its objection to postponing local elections. Smotrich himself called that draft publication "a mistake." The Public Health Physicians Association attacked the move at the time as "an enormous gift to beverage companies at the public's expense."

The temporary cancellation became permanent in December 2024, and the Finance Ministry estimated the state was forgoing roughly ₪360 million a year in revenue as a result (Globes). Facing a petition against the decision, Smotrich didn't back away from the ideological framing: "Taxes aren't meant to educate," he answered, per Ynet, casting the cancellation as a matter of economic-right principle — consumer freedom over government intervention.

The Tax Authority's finding: prices rose fast, and fell slowly

Here's the part worth pausing on. Calcalist reports on a Tax Authority analysis published in August 2026: three years after the tax was cancelled, sweetened-beverage consumption in Israel is still about 6% below its 2021 level — before the tax ever existed. When the tax took effect in 2022, consumption dropped roughly 12%; after it was cancelled, it recovered by only about 5%, never returning to its starting point.

The sharpest gap was in the Haredi sector, where the analysis found the swing was far stronger in both directions: a 20.2% drop in consumption when the tax was imposed (versus 11.8% in the general population), and a 12.2% jump back after cancellation (versus 5.1% generally) — but even there, consumption stayed about 9% below 2021 levels. In other words: the very public whose political pressure got the tax cancelled is the one that kept drinking the least of it.

And here's the link between consumption and price: per that same analysis, when the tax was imposed, manufacturers raised the per-liter price by more than the tax itself — a six-pack of 1.5-liter Coca-Cola, for instance, rose 32% per liter. When the tax was cancelled, the price fell only 16% per liter — less than half of the original hike. Put simply: the price climbed a tall step up, and came back down a much shorter step — and that gap stayed in someone else's pocket, not the consumer's.

What our own data shows: the real gap is between chains, not tax years

As a service that scans the official price files of all 34 grocery chains in Israel, what interests us isn't just what happened to the price over time — it's what the exact same product costs today, chain against chain. We checked: a bottle of regular 1.5-liter Coca-Cola, identical barcode, appears in our data at 941 different stores (excluding Eilat, which is VAT-free and therefore cheaper by default). The range: from ₪7.90 at Keshet Ta'amim to ₪15.90 at Yeilo — exactly double, a 101% gap, on the identical product, on the same day.

Put that in perspective: the entire fight over the tax — imposed, cancelled, then made permanent — was over one shekel per liter, layered onto a bottle that already costs anywhere from ₪7.90 to ₪15.90 depending purely on which chain you're standing in. The cheap end — Rami Levy and Mahsanei HaShuk, for instance — starts around ₪8.20-8.30 a bottle; Yeilo, already the most expensive chain in our own index (31% above the national median), sells the identical bottle for almost double that. If you really wanted to dodge the tax in 2022, you didn't need to sign a petition — you just needed to shop at a different chain.

The bottom line

Israel's sugar tax was, and remains, a political story before it's an economic one — born and killed by coalition pressure, not health arithmetic alone. But the more revealing number here isn't who won that argument. It's what it exposes about how prices in Israel move in general: up, fast and generously; down, slow and stingy. And while everyone argued over the one shekel per liter that came and went, the real gap on the shelf — between the cheapest chain and the priciest one, on the exact same product — was already double. Worth checking before you keep arguing about the tax.

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