UK government shocks with sugar tax announcement

By Niamh Michail

- Last updated on GMT

It's tax time: The British government has announced a £520 m (€662 m) levy on sugary drinks in order to battle child obesity. © iStock
It's tax time: The British government has announced a £520 m (€662 m) levy on sugary drinks in order to battle child obesity. © iStock

Related tags Nutrition

The British government has announced a tax on sugar-sweetened beverages, giving companies two years to reformulate.

Pure fruit juices and milk-based drinks will be excluded from the tax, which is expected to raise £520m (€662m) in funds. This will be used to fund sport in UK primary schools.

Finance minister George Osborne said the smallest producers will be kept out of the scope.

Osborne told Parliament during his budget speech: “I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation: ‘I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing.’

“So today I can announce that we will introduce a new sugar levy on the soft drinks industry.”

Starting in two years time to allow time for firms to reformulate sugar out of their products, the tax will be determined by the volume of sugary drinks companies produce or import.

There will be two bands, one for total sugar content above 5 g per 100 ml and a second band for the most sugary drinks with more than 8 g per 100 ml.

“Of course, some [manufacturers] may choose to pass the price onto consumers and that will be their decision, and this would have an impact on consumption too," ​Osborne said.

“We understand that tax affects behaviour. So let’s tax the things we want to reduce, not the things we want to encourage.”

Political theatre

Reacting to the announcement, director general of the industry group Food and Drink Federation (FDF), Ian Wright, slammed the move as a “piece of political theatre”.

"We are extremely disappointed by today's announcement of a new tax on some of the UK's most successful and innovative companies. For nearly a year we have waited for an holistic strategy to tackle obesity. What we've got today instead is a piece of political theatre.

“The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs. Nor will it make a difference to obesity. Many of those singled out today by the Chancellor have been at the forefront of efforts to provide consumers with healthy choices. The industry will now ask whether such efforts are still affordable."  

But the announcement was welcomed by public health campaigners.

Professor Graham MacGregor, chair of Action on Sugar, said: “We are delighted to see in today’s budget announcement that the government will be introducing a new sugar levy on soft drinks which will be used to double the funding they dedicate to sport in every primary school.

"However, for this to be effective it’s imperative that the levy is at least 20% on all sugar-sweetened soft drinks and confectionery and escalate thereafter if companies do not comply to reformulation targets – and this must be implemented immediately.”

Campaigners and industry are now waiting for details of prime minister David Cameron’s childhood obesity strategy.

In its report last year, Public Health England, the body which advises the government on public health policy recommended measures such as restrictions on price promotions, advertising junk food and mandatory reformulation. 

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