You don’t have to outlaw anything. Disincentivize it.
“But then only the rich will get to rot their teeth out!” Good, I guess? So what?
“Poor people will still spend money on sugar water! You’ll drive them deeper into poverty!” Then the price isn’t high enough yet. It needs to exceed the cost of the dental and medical work it will precipitate. Which by definition will price many poor people out of sugar water. Which it should.
Nice approach, but IMHO outlawing would be easier and healthier for the society:
Easier: track down illegal sugary drinks is easier that track down at what price a drink is illegally sold.
Healthier: forbid those drinks and all the folks forking for that industry will now work for something more useful the the society instead of trying to find ways to convince people to drink their shitty fluid.
You don't have to know at what price the drinks are sold. All that matters as the government is that you know how much is being moved around. Then you charge each link in the chain appropriately. The rest works itself out in the market.
I disagree with the legislative approach, but just think of how much cheap/free labor the war on drugs supplies. A war on sugar would keep those numbers up! Good job boys, promotions all around!
In the more boring dystopia, the disincentivization would lead to poor quarterly financials and cause the same movement in the industry. Nobody is pumping out cola at a loss simply because it's their passion project.