Sugary soft drinks cost more from today

By Nicholas Robinson contact

- Last updated on GMT

Soft drinks tax: do you know what it means?
Soft drinks tax: do you know what it means?
The price of a full-sugar soft drink will cost more from today as the soft drinks industry levy officially comes into force.

This means soft drinks with a total sugar content above 5g per 100ml will be 18p more expensive per litre, and those with above 8g of sugar per 100ml will cost 24p more per litre.

Government has enforced the levy in a bid to curb obesity in the country, but industry experts and soft drinks producers say the sector is not the root cause of the UK’s expanding waistband.

Producers including Coca-Cola, Britvic and Nichols, which produces Vimto, have already removed a significant proportion of sugar from soft drinks.

It is estimated chancellor Philip Hammond’s tax on sugar will raise £520m, which will be used to fund sports in primary schools.

However, due to the significant amount of work carried out by manufacturers to reformulate products to contain less sugar, it is believed that amount will fall by more than £200m.

Fruit juices

Some sugar-containing soft drinks are exempt from the levy, including milk drinks, chilled coffee drinks and fruit juices.

The value of soft drinks to pubs and bars has grown in the past year by 1.5% to £22.1bn, according to Britvic’s recently released Soft Drinks Review​.

Around 30% of the soft drink spend in the foodservice sector already comes from low- and no-sugar soft drinks, which is expected to rise as consumer education increases and manufacturers produce more options.

Partner and food and drink industry expert at Gordons law firm Mark Jones said: "Although the sugar tax is clearly a step in the right direction, there is little evidence to demonstrate it actually tackles the problem of calorie intake/calorie balance.

"If the UK is to really take steps to tackle obesity, we need regulation and taxes on high calorie and high sugar food products too. And with the poor health of our nation costing the public purse so much, I would expect to see that in the coming years unless there are big changes from food manufacturers."

Investec analyst Nicola Mallard, however, explained that, although the levy has come into force, it was possible price increases would not be pushed onto operators and consumers just yet, as high volumes of stock in some supply chains may have been bought at pre-levy prices.

Prepared for enforcement

Last year The Morning Advertiser ​hosted a webinar in association with Britvic to ensure operators were prepared for the enforcement​ of the levy.

At the recording, Mumsnet co-founder Carrie Longton highlighted the importance of health among consumers today, especially parents.

In response to questions about sugar in soft drinks, 77% of parents said they were more conscious of added sugar when purchasing for themselves, which rose to 87% when buying soft drinks for their children.

Though there is much negativity surrounding the levy, there were opportunities for operators, she explained.

“It’s not just about health, it’s about your bottom line because if you can create something that my kids think is a treat, but I as a parent am very happy to give to them, that will absolutely do your bottom line a world of good,” said Longton.

Following the launch of the sugar tax webinar, MA ​also published a list of soft drinks exempt from the levy, entitled ‘Which soft drinks are not included in the sugar levy?’​.

Related topics: Soft & Hot Drinks

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