Soft drink sugar tax starts, but will it work?
The “ground-breaking” sugar tax on soft drinks has come into force in the UK.
From Friday manufacturers have to pay a levy on the high-sugar drinks they sell.
Ministers and campaigners believe it has already proved to be a success with many firms reducing sugar content ahead of the change. But others say it is still too early to judge the impact.
Leading brands such as Fanta, Ribena and Lucozade have cut the sugar content of drinks, but Coca-Cola has not.
The introduction of the levy means the UK joins a small handful of nations, including Mexico, France and Norway, which have introduced similar taxes.
How will it work?
The levy is being applied to manufacturers – whether they pass it on to consumers or not is up to them.
Drinks with more than 8g per 100ml will face a tax rate equivalent to 24p per litre.
Those containing 5-8g of sugar per 100ml will face a slightly lower rate of tax, of 18p per litre.
Pure fruit juices will be exempt as they do not carry added sugar, while drinks with a high milk content will also be exempt due to their calcium content.
Originally, the Treasury forecast it would raise more than £500m a year, but that has now been reduced to £240m because some manufacturers have reduced the sugar content in their products.
In England that income is being invested in schools sports and breakfast clubs.
Products such as cakes, biscuits and other foods are not covered by the tax, although a separate initiative is encouraging manufacturers to reduce the sugar content of those items voluntarily.
‘Too much stick, not enough carrot’
But will it work? The jury is still out.
University of Bedfordshire nutrition expert Dr Daniel Bailey said that while the levy is a “positive step” in tackling obesity and had led to a “notable” reaction by the industry, the response by consumers is uncertain.
“The increase in tax placed on soft drinks will make products more expensive, but will this actually discourage people from buying them?
“We could just end up with consumers buying the same amount but paying more.”
Polling suggests this may be the case for many people.
Research by Mintel found just under half of Britons say taxing unhealthy products would encourage them to cut back.
By comparison easier-to-understand nutritional information would alter the purchasing habits of three-quarters of people, the survey of 2,000 people showed.
Mintel’s associate director of food and drink Emma Clifford said it suggested “carrot” rather than “stick” may be a better approach.