The survey of 1,000 people aged 18 to 35, found they were 36% less likely to buy a sugary drink if it carried a picture such as rotten or decaying teeth.
A sugar tax on soft drinks has already been introduced in the UK with producers either reformulating their products or increasing prices.
But the report argues that labelling could also play a significant role in tackling obesity.
Professor Anna Peeters, lead author from Deakin University in Australia, said: “The question now is what kind of impact these labels could have on the obesity epidemic.
“While no single measure will reverse the obesity crisis given that the largest source of added sugars in our diet comes from sugar-sweetened drinks, there is a compelling case for the introduction of front-of-pack labels on sugary drinks worldwide.”
The participants in the study were divided into five groups and asked to choose from a selection of 15 drinks, including sweetened and unsweetened options.
The options were either unlabelled, or included one of four labels: a graphic warning showing an image of crooked teeth, a text warning, information about the number of teaspoons of added sugar, or a health rating.
It found those taking part were 36% less likely to purchase sugary drinks that included a graphic warning compared to those without a label, and 18% less likely to buy those with sugar information on the packaging.
A picture of tooth decay proved far more effective than a written warning only, with the images described by some as “revolting and frightening and shocking”.
Gavin Partington from the British Soft Drinks Association said measures taken by the industry recently were already having an effect.
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“Experience in the UK suggests that action industry is taking – around reformulation, portion size and switching advertising spend to low or no calorie products – is having ample effect in changing consumer behaviour,” he said.
“In fact, sugar intake from soft drinks in the UK has fallen by almost 19% since 2013 – five times as much as other categories, according to latest Public Health England data.”