Sugar tax

Sugar tax could spark industry legal action

By Michelle Perrett

- Last updated on GMT

The Chancellor's sugar tax budget bombshell could result in legal action
The Chancellor's sugar tax budget bombshell could result in legal action

Related tags Soft drinks Political philosophy

Soft drinks companies are looking into options, including legal action, in the wake of the government plans to introduce a soft drinks tax.

In last week’s Budget George Osborne revealed the tax would come into force in two years’ time and would raise £520M in its first year.

The British Soft Drinks Association, director general, Gavin Partington, said:  "At this stage all options are on the table.

“We need clarification about how this tax is going to work, exactly what's excluded and what's not. Nothing can be ruled out at this stage."

A ‘legal minefield’

Only last week Hilary Ross, executive partner and head of retail, food and hospitality at law firm DWF, said the introduction of a sugar tax would be a legal challenge for the government.  

“Introducing a sugar tax is a legal minefield – a  number of hurdles will need to be addressed, as demonstrated by the minimum alcohol pricing in Scotland, for whatever is proposed to comply fully with EU legislation,”​ she said.

However, individually drinks companies were unwilling to be drawn on possible legal action but said they would be looking closely at the government plans.

Coca-Cola failed to rule out legal action.

A spokesman said:  “We need to know more about the levy​ and how the government plans to implement it.  Once this is clear to us, we’ll decide on what steps to take as a business and how best to continue the work we have done to help people consume less sugar and calories from our drinks.”

Britvic, which produces J20 and Pepsi, said it would review the details of the announcement and would fully engage in the consultation process.

We remain of the view that only a holistic, wide-ranging strategy will tackle obesity,”​ said a Britvic spokesperson.

​Not solve obesity problem

“Singling out soft drinks alone will not solve the obesity problem, given the small proportion of calories they contribute in the average diet. 

“As the Chancellor recognised during his speech, Britvic has already voluntarily made significant progress in calorie and sugar reduction, taking bold steps to remove over 18 billion calories since 2012.”

Nichols, the supplier of Vimto and Panda Pops, said it had also worked hard and had already reduced sugar consumption by 8% year-on-year.

Marnie Millard, chief executive of Nichols, said: “Whilst we recognise sugar consumption is a shared responsibility, we do not believe that a tax on soft drinks is an effective solution or fair to consumers.”

Meanwhile, don't miss three unanswered questions​ about the sugar tax.

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