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UK to introduce tax on sugary drinks by 2018

DBR Staff Writer Published 17 March 2016

The UK government has announced plans to introduce a levy on sugary drinks within in a span of two years to address growing cases of childhood obesity.

UK sugar tax

The announcement came during the Budget 2016 presentation by Chancellor George Osborne.

Starting April 2018, soft drinks companies will be required to pay levy on drinks with added sugar.

The rule will apply to drinks with total sugar content above 5 grams per 100 millilitres, with a higher rate for more than 8 grams per 100 millilitres.

However, the tax will not be applicable for milk-based drinks or fruit juices.

The proceeds from the tax will be used to double the primary physical education and sport premium, which the additional amount that schools have to spend on physical education and sports, to £320m a year.

According to George Osborne's estimates, the measure would raise $735.8m in its first year, with receipts declining eventually as manufacturers cut down sugar content in their products.

George Osborne said: "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.'"

The move is being hailed by public health campaigners and public health support groups.

Last October, Public Health England had recommended in its report to impose a 10-20% sugar tax on soft drinks and a restriction on advertisements and marketing of sugary foods targeting children.

Public Health England CEO Duncan Selbie said: "A sugary drinks levy is fabulous news for children and families in helping them to cut back on sugar. This will reduce the risks of obesity, tooth decay and other life threatening diseases. This is public health in action and a great foundation ahead of the child obesity strategy later this summer.

"A levy or tax was 1 of 8 recommendations from PHE's evidence review on sugar reduction and is a stunning early indication of the Government's commitment to reducing child obesity. The Chancellor has firmly set this in the context of every child having the right to a good start to life, especially good that the money raised will be used to boost funding for school based exercise and sport."

The move, however, has brought disappointment to soda makers and anti-sugar tax campaigners.

Food and Drink Federation director general Ian Wright said: "We are extremely disappointed by today's announcement. The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs."

The move follows just months after the government rule out the possibility of sugar tax on soft drinks.

Image: UK levies tax on drinks with added sugar content. Photo: Courtesy of The UK Government/Crown copyright.