BACKGROUND: Countries around the world are putting in place sugar reformulation targets for packaged foods to reduce excess sugar consumption. The Australian government released its voluntary sugar reformulation targets for nine food categories in 2020. We estimated the potential impact of these targets on household sugar purchases and examined differences by income. For comparison, we also modelled the potential impact of the UK sugar reduction targets on per capita sugar purchases as the UK has one of the most comprehensive sugar reduction strategies in the world. METHODS: Grocery purchase data from a nationally representative consumer panel (n=7,188) in Australia was linked with a large database (FoodSwitch) with product-specific sugar content information for packaged foods (n=25,261); both datasets were collected in 2018. Potential reductions in per capita sugar purchases were calculated overall and by food category. Differences in sugar reduction across income level were assessed by analysis of variance. RESULTS: In 2018, the total sugar acquired from packaged food and beverage purchases consumed at-home was 56.1 g/day per capita. Australia's voluntary reformulation targets for sugar covered 2,471/25,261 (9.8%) unique products in the FoodSwitch dataset. Under the scenario that all food companies adhered to the voluntary targets, sugar purchases were estimated to be reduced by 0.9 g/day per capita, which represents a 1.5% reduction in sugar purchased from packaged foods. However, if Australia adopted the UK targets, over twice as many products would be covered (n=4,667), and this would result in a more than four times greater reduction in sugar purchases (4.1 g/day per capita). It was also estimated that if all food companies complied with Australia's voluntary sugar targets, reductions to sugar would be slightly greater in low-income households compared with high-income households by 0.3 g/day (95%CI 0.2 - 0.4 g/day, p<0.001). CONCLUSIONS: Sugar-reduction policies have the potential to substantially reduce population sugar consumption and may help to reduce health inequalities related to excess sugar consumption. However, the current reformulation targets in Australia are estimated to achieve only a small reduction to sugar intakes, particularly in comparison to the UK's sugar reduction program.