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Soft drinks levy increases sales of lower-sugar soft drinks in UK

DBR Staff Writer Published 29 May 2018

Research from market data company IRI has revealed that sales of soft drinks have increased in value by £5m to £167m a week since the soft drinks sugar's levy introduction on 6 April 2018.

The research firm in its report stated that as the price of sugary drinks increased, consumers shifted to alternative or less sugary drinks and water. This translates to 7% or about 11 million litres of lower sugar soft drinks that are being consumed every week.

IRI said soft drink giants such as PepsiCo and Coca-Cola have suffered less due to the impact, with only 2% to 1% respectively in sales impact and all other major brands are claimed to have seen positive impact in volume sales.

On a year-on-year basis, the sales for low and no sugar and water products increased by 8 and 9% respectively last year. Also, the volume of sugary drinks were down by 11% in 2017.

To meet the tax threshold, soft drinks needed to contain at least 5g of added sugars per 100ml for ready-to-drink or diluted products. This equals to an additional £0.18 per litre for drinks with 5g or more of sugar per 100ml and drinks with more than 8g per 100ml were taxed at a rate of £0.24 per litre.

Announced in 2016, the sugar tax was intended to raise £520m which will be invested in funding sports equipment and breakfast clubs for children.

IRI insight director Stephen Jacobs said: “The introduction of the UK sugar levy has had a clear impact on the soft drinks category without effecting volume sales, so far.

“Good weather always leads to a rise in soft drinks sales but there is no doubt that higher prices have driven consumers to make healthier choices with one of every 13 soft drinks sold a low-sugar alternative.

Jacobs continued saying: “There is no doubt higher prices have driven consumers to make healthier choices.”

Public Health England, the public health body for England, stated that it will conduct a review of the sugary tax in 2020 and will check whether to add milk-based drinks to the sugar tax.

Image: UK adds £5m from sugary tax since April. Photo: Courtesy of ArPleum/FreeDigitalPhotos.net.