Britain’s sugar tax on soft drinks takes effect

Britain’s sugar tax on soft drinks came into effect on 6 April 2018, a move that hopes to reduce sugar intake, whilst funding sports programs and nutritious breakfast clubs for children.

The tax, announced in March 2016, has already cut sugar content in drinks by 45 million kg per year, Britain’s Treasury said, as over 50 percent of manufacturers have reformulated their products to be below the levy’s sugar threshold.

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

Because of the reformulations, the Treasury now expects the levy to raise only about 240 million pounds ($460 million) in its first year, less than half of its prior forecast of 520 million.

A number of soft drink makers, including Coca-Cola, have reformulated drinks to be below the levy’s threshold.

Although the Brits have joined some of their European neighbours with the move, the tax has been met with furious resistance from some quarters with opponents saying it will hit the poor hardest and actually misses out some of the most sugary drinks.

What is the sugar tax?
The sugar tax is a levy put on drinks companies to crack down on high sugar levels in soft drinks, with companies now taxed according to the sugar content of their wares.

One is for drinks with a total sugar content of more than 5g per 100ml, while a second, higher levy is imposed on drinks with 8g per 100ml or more.

What will the tax be used for?
The tax was originally estimated to raise around £520 million  (NZD$997 million), but because of reformulations, Treasury now expects the levy to raise only about 240 million pounds (NZD$460 million) in its first year, which will be used to fund sports in primary schools.

How much will fizzy drinks increase by?
A standard can of regular coke has gone up by around 8p (15 cents) for a 70p ($1.35) can.

A 1.75ml bottle of coke has increased from roughly £1.25 (NZD$2.40) to £1.49 (NZD$2.85).

What has been exempted from tax?
Drinks with a high milk content are exempt due to their calcium content. Pure fruit juices are also exempt. Sugar-free soft drinks such as Diet Coke and Coca-Cola Zero are not subject to the tax.

Will the sugar tax work?
Other countries have introduced similar measures and have seen some success in reducing the drinking of fizzy drinks.

Mexico introduced a 10 per cent tax on sugary drinks in 2014 and saw a 12 per cent reduction over the first year. Hungary brought in a tax on the drinks companies and saw a 40 per cent decrease in the amount of sugar in the products.