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Soft drinks sugar tax comes into effect in UK

DBR Staff Writer Published 09 April 2018

A levy on sugary soft drinks has come into force in the UK as part of the government’s plan to tackle childhood obesity.

The Soft Drinks Industry Levy charges manufacturers depending on the amount of sugar they add to beverages.

The tax on soft drinks, which was announced in March 2016, saw more than 50% of manufacturers reduce the sugar content of drinks, equal to 45 million kilograms of sugar every year.

UK Public Health Minister Steve Brine said: "Our teenagers consume nearly a bathtub of sugary drinks each year on average, fuelling a worrying obesity trend in this country.

"The soft drinks industry levy is ground-breaking policy that will help to reduce sugar intake, whilst funding sports programs and nutritious breakfast clubs for children."

According to the new tax regime, soft drink companies will have to pay £0.24 per liter of drink if it contains 8g of sugar per 100ml and £0.18 per litre of drink if it contains between 5g to 8g of sugar per 100ml.

Since the levy was announced two years ago, the estimated amount of revenue has gone down from £520m in first year to £240m.

Although major soft-drink manufacturers including Coca-Cola, Britvic, Pepsi and Lucozade Ribena Suntory have already altered their recipes, some products including Coca-Cola Classic, which is the country’s top selling soft drink and Pepsi, are expected to have more than 10g of sugar per 100ml, resulting in tax levy.

Soft drinks from retailers such as Tesco, Asda and Morrisons are also said to have altered the sugar content in their own brands to avoid the tax.

New research conducted by the UK Institute of Fiscal Studies has suggested that the new sugar tax could lead to reduced sugar consumption among only a select group of people.

As per the researchers, most consumers could see some reduction in their sugar consumption, but, young consumers are expected to see their consumption drop by 80% more than the average consumer.

On the other hand, the British Soft Drinks Association has stated that there is no evidence to suggest that tax on a single category which is soft drinks can reduce obesity.

The association suggested that soft drink companies have been reducing about 19% of sugar content since 2013.

Exchequer Secretary to the Treasury, Robert Jenrick said soft drinks which contain too much added sugar will need to pay a fee from now.

“All revenues raised through the levy will directly fund new sports facilities in schools as well as healthy breakfast clubs, ensuring children lead healthier lives,” Jenrick said.

Image: The Sugar Tax will help to reduce sugar in soft drinks and tackle childhood obesity. Photo: Courtesy of Naypong/FreeDigitalPhotos.net.