The cost of a can of cola, lemonade or Red Bull is likely to rise by about 8p, while a two-litre bottle of any high-sugar soft drink will go up by 48p once the government’s sugar levy comes into force.
Details of the levy have just been published, although the exact amount of the increases will not be announced until next year. But using figures from the Office of Budget Responsibility, experts believe the two tax bands will add 18p to the cost of a litre of soft drink containing 5g of sugar per 100ml, and 24p to one that has more than 8g of sugar per 100ml.
That would increase the cost of a 330ml can of Coca-Cola from about 68p to 76p, although it is much cheaper if bought from a supermarket in bulk. A one-litre bottle would increase from about £1.25 to £1.49. The diet versions would begin to look more attractive if they remain at the lower price.
In the face of strong lobbying from the soft drinks industry, HMRC published the proposals announced by George Osborne in his final budget in March. They were welcomed by health campaigners, who said the move could make inroads into the UK’s obesity problem. “After years of campaigning, we are very pleased to see the government moving forward with this draft legislation,” said Dr Max Davie, assistant officer for health promotion for the Royal College of Paediatrics and Child Health.
“The sugary drinks that will be affected by this tax have no nutritional benefit and often contain levels of sugar that are above a child’s daily recommended limit. These drinks are a major contributor to the high sugar intakes of children, particularly teenagers, and we are in no doubt that they are, in part, contributing to this country’s obesity crisis.”
The Obesity Alliance, a coalition of more than 30 health charities, said the measure was necessary. “Sugary soft drinks are currently the largest source of sugar for children, and this high sugar intake is driving the deadly obesity epidemic which costs our health service billions of pounds every year,” it said in a statement. “Tackling obesity today will save money tomorrow. We support the soft drinks industry levy to help protect our children’s future health, and make healthier choices easier for everyone.”
Others questioned whether the levy would raise prices high enough to change behaviour. “Because the increased in cost is so small [6p to 8p per 330 ml], it is highly unlikely to deter consumption among children and young adults,” said Tom Sanders, professor emeritus of nutrition and dietetics at King’s College London. “There is much greater variability in price for the same product depending on where it is purchased. For example, the price of a 330ml serving ranges from 30p when bought in bulk at Tesco to about £1.50 at a railway station. The price is even higher in restaurants; for example, a coke is listed as costing £2.65 in Jamie’s Italian.”
What would be interesting, Sanders said, was whether these restaurants and stalls would pass on the lower cost of sugar-free drinks to their customers, which might make them choose the less fattening option.
The levy is also intended as an incentive to companies to reformulate their drinks with a lower sugar content. Tesco announced in November that it was cutting the sugar content in all its own-brand soft drinks to less than 5g per 100ml, which means it will escape the levy.
Most of the soft drinks manufacturers are continuing to fight the levy. Gavin Partington, director general of the British Soft Drinks Association, said: “There is no evidence worldwide that taxes of this sort reduce obesity, and it is ironic that soft drinks are being singled out for tax when we’ve led the way in reducing sugar intake, down over 17% since 2012. We’re also the only category to have set a 20% calorie reduction target for 2020.”
