SUBSCRIBE

Breaking News on Food & Beverage Development - EuropeUS edition | APAC edition

News > Market Trends

Read more breaking news

 

 

Sugar tax confusion could hit sales of confectionery, biscuits and cakes

By David Burrows , 12-May-2017
Last updated on 16-May-2017 at 13:55 GMT2017-05-16T13:55:09Z

Last month the UK’s sugar tax on soft drinks was passed by parliament, and many European countries are watching developments closely as they mull over similar approaches to tackle obesity. ©iStock/SIPhotography
Last month the UK’s sugar tax on soft drinks was passed by parliament, and many European countries are watching developments closely as they mull over similar approaches to tackle obesity. ©iStock/SIPhotography

Brits are completely baffled by the country’s planned new levy on sugar-sweetened drinks, with many believing it covers food as well.

Nearly eight in 10 people are aware there’s a tax on sugar but there’s a “huge misunderstanding” about the products it will affect, according to research conducted by Nielsen. For example, 28% don’t think the new measures will cover soft drinks – when in fact it’s the only category that will be taxed.

Not one of the 593 adults quizzed correctly identified that the new charge will only apply to soft drinks. Two thirds think that confectionery will also be taxed. Similar numbers believe the charge will be applied to chocolate (59%), biscuits (57%) and cakes (56%).

Last month the UK’s sugar tax on soft drinks was passed by parliament, and many European countries are watching developments closely as they mull over similar approaches to tackle obesity . However, Nielsen found that only one in three shoppers expect to reduce their consumption of sugary drinks when the prices go up next April.

Tax proves taxing

The findings suggest manufacturers, retailers and politicians have “an enormous education job on their hands to avoid unforeseen consequences beyond fizzy drinks.”©iStock/elenachaykina

The findings suggest manufacturers, retailers and politicians have “an enormous education job on their hands to avoid unforeseen consequences beyond fizzy drinks”, said Sophie Jones, senior analytics consultant at Nielsen. “There’s a huge misunderstanding about what products the sugar tax affects,” she added.

Most at risk are the high-sugar categories where people incorrectly think prices have increased. There’s also a chance that some people will offset the higher price of fizzy drinks by spending less on other goods – 14% said they would spend less in other categories when the price of sugary soft drinks increases.

How will others react to the higher prices? Nearly one in four (23%) think they will purchase fewer soft drinks and 13% will stop buying them altogether. But that means just one in three consumers (36%) will do what the tax is designed to encourage – reduce consumption of sugary drinks.

Indeed, around one in ten (11%) said they are likely switch to cheaper brands and almost half (47%) won’t change their buying habits at all. The findings will lead to further questions regarding the effectiveness of a tax focused on one category.

“It’s worth bearing in mind that there is no evidence taxing a single product or ingredient has reduced levels of obesity anywhere in the world,” noted British Soft Drinks Association director-general Gavin Partington recently. Earlier this month the UK Food & Drink Federation warned the government not to implement any future nutrient taxes on foods .

Whilst campaigners back the sugar tax on soft drinks, they see it as just one piece of the regulatory jigsaw needed to reduce rising levels of obesity. Indeed, many were left disappointed with the childhood obesity strategy, published in August. The expected regulations on marketing of junk foods were scrapped, and whilst reformulation targets have been set, they’re voluntary rather than mandatory.

In a report published in March, MPs in the cross-party health committee said the government needs to take more robust action to tackle the impact of deep discounting and price promotions on the sales of unhealthy food and drink”.

Related products

Key Industry Events