Move will see new low-calorie products introduced, as well as current products being reformulated
PepsiCo Inc has set a global target for sugar reduction in its products in order to combat growing obesity rates.
The New York-based company has announced that by 2025 at least two thirds of its drinks will have 100 calories or fewer from added sugar per 12 oz serving, up from about 40 percent now.
It plans to achieve this by introducing more zero and low-calorie drinks and reformulating existing drinks.
PepsiCo and its main rival Coco-Cola have come under pressure from health experts and governments to take action, blaming them for the fuelling obesity levels.
Its 2025 goals also include targets for lowering sodium and saturated fat.
Coke has said that by 2020 it would offer low-calorie or no-calorie options in every market as part of its own sustainability goals.
The announcement comes after the World Health Organisation's recent report encouraging all countries to implement a tax on sugary drinks.
The report says that a tax of 20% or more results in a drop in sales and consumption of sugary drinks. People consume fewer "free sugars" such as fructose and glucose, take in fewer calories and reduce their risk of tooth decay.
"Consumption of free sugars, including products like sugary drinks, is a major factor in the global increase of people suffering from obesity and diabetes," said Dr Douglas Bettcher, director of the WHO’s department for the prevention of non-communicable diseases.
"If governments tax products like sugary drinks, they can reduce suffering and save lives. They can also cut healthcare costs and increase revenues to invest in health services."
Finance Minister Michael Noonan announced the introduction of a sugar tax as part of this year's budget, to take effect in 2018.
Noonan said that the tax would be introduced in line with similar UK plans in April 2018.
Before that, there will be public consultation over the measure which will run until January next year.
“It is of utmost importance to me that such a tax is as effective as possible, as fair as possible, and minimises the administrative burden on business,” he said.
The Irish Beverage Council criticised the measure following the announcement last week.
Kevin McPartlan, director of the Irish Beverage Council, said the group was "extremely disappointed" with the move.