SOFT drinks with a sugar content of 5g or more per 100ml will be subject to an 18p per litre levy, Chancellor Philip Hammond has revealed, with a higher band of 24p per litre for drinks containing 8g of sugar.
The new levy, scheduled for implementation in April 2018, will apply to the producers and importers of these drinks, and will not apply to any drink where no sugar is added or to drinks with an ABV of 1.2% or higher.
Addressing the sugar levy during his 2017 Budget presentation, Hammond said he was in the unusual position of being “delighted to announce a reduction in the expected yield of a tax”, highlighting the work of soft drinks producers in reformulating a number of drinks to a lower sugar content.
“This is good news for our children,” said Hammond.
The Treasury predicts the levy will raise £385m for the exchequer in its first year.
Gavin Partington, director general of the British Soft Drinks Association said that given the “current increases in cost of goods”, the association is “surprised the treasury wishes to put more pressure on businesses and raise prices for hard-pressed consumers.”
“It’s also ironic that the tax hits the soft drinks category, which has led the way in helping consumers reduce sugar intake – down nearly 18% since 2012.
“We support the need to address the public health challenge the country faces, but it’s worth bearing in mind that there is no evidence taxing a single product or ingredient has reduced levels of obesity anywhere in the world,” said Partington.