UK Budget 2017: Soft Drinks Industry Levy Rates Confirmed

09 Mar 2017 --- Yesterday Chancellor Philip Hammond confirmed the final Soft Drinks Industry Levy rates of 18 pence per liter and 24 pence per liter for the two sugar bands at 5g/100ml and 8g/100ml respectively. It is now over to MPs to pass the legislation, and then manufacturers and retailers to continue to raise their sugar reduction game.

The UK government Treasury announced how much the soft drinks industry will be charged from April 2018 if sugar is not reduced in soft drinks.

Making the Soft Drinks Industry Levy a reality will help reduce the nation’s sugar intake, and a number of companies in the UK have already announced intentions to reduce sugar in their products.

Maintaining a healthy balanced diet can also help those living with diabetes manage their condition better and avoid devastating consequences including amputations, blindness, or even an early death.

Chief Executive of Diabetes UK, Chris Askew, said: “We’re all eating too much sugar, and this can lead to obesity which is a major risk factor in developing Type 2 diabetes. The Soft Drinks Industry Levy as an important measure to help reduce the nation’s sugar consumption.”

“We will continue to work with, and encourage manufacturers to ensure people living with Type 1 and Type 2 diabetes, who may use high sugar products to treat low blood glucose, are kept in the loop of any changes to these goods. However, we urge people to read labels carefully before using any products to treat a hypo.”

The Levy now needs to be agreed by Parliament as part of the Finance Bill, which we hope will happen by July 2017.

We want more manufacturers to get involved in the sugar reduction program with Public Health England. This will help create a healthier environment for everyone and reduce the risks of developing preventable health complications.

Malcolm Clark, co-ordinator of Children's Food Campaign, who has welcomed the Budget 2017 news about the Soft Drinks Industry Levy, said: “The Chancellor’s confirmation of the sugary drinks tax rates today is vindication of the efforts parents, campaigners and health professionals have made to counteract industry’s opposition to the tax.” 

“It is now over to MPs to pass the legislation, and then manufacturers and retailers to continue to raise their sugar reduction game.”

As the Treasury itself confirms: “The levy is already working. Since we announced the measure last March several major companies have accelerated their reformulation work to cut sugar ahead of introduction in April 2018. These include Tesco, Lucozade-Ribena-Suntory and AG Barr.”

“We now expect more than 40% of all drinks that would otherwise have been in-scope to have been reformulated by the introduction of the levy.”

This means that the forecast revenues for the levy are now, but we will continue to fund schools with the £1 billion ($1.2 billion) we originally expected from the levy this Parliament – including money for schools sports, breakfast clubs and a new Healthy Pupils Capital Fund.
 
Clark further commented: “It is welcome news that the Chancellor has held his nerve and kept the Soft Drinks Industry Levy rates at the meaningful levels originally proposed. The prospect of those rates has already led to significant sugar reduction moves, and had a positive ripple effect on other sectors, as well as in Ireland and further afield.” 

“The experience from other countries shows that the biggest health impact is felt only when sugar-free products are priced cheaper than their sugary counterparts. That £1billion funding to help schools promote healthier lifestyles has been guaranteed is also great news for children’s health.”

The Obesity Health Alliance, which Children's Food Campaign is a member of, also issued this response to yesterday's Budget: “The Soft Drinks Industry Levy is a bold, positive and necessary move we believe will help reduce the amount of sugar our children consume.”

“There is evidence from other countries that show similar taxes have helped to reduce the amount of sugary soft drinks consumed.”

“We’ve already seen a number of companies in the UK announce plans to reduce sugar content in their products, so clearly the potential impact is huge. This is a significant step in the battle against obesity and the Government should be applauded for its commitment to seeing it through.”

Ian Wright CBE, Director General, Food and Drink Federation said: “We are pleased to see productivity and innovation at the heart of today's Budget.”

“We welcome the Chancellor's commitment to improve productivity, boost R&D and help bridge the skills gap. Access to a skilled workforce is particularly pressing for food and drink manufacturing as we require an additional 130,000 new recruits by 2024. It is important that food and drink manufacturing as a sector is fully recognized in the new technical qualifications and we look forward to being closely involved in their implementation.”

“It was also pleasing to see details of how the £4.7 billion from the National Productivity Investment Fund announced at Autumn statement will be invested in science and innovation. A number of global food and drink companies have already chosen to base their R&D centers here and we want the UK to be the number one location of choice for others too.”

“The revision of the R&D tax credits system was something we had asked government for and we support. Increasing simplicity around the process for claiming R&D tax credits will benefit companies of all sizes - and SMEs particularly.”
 
“We continue to oppose the Soft Drinks Industry Levy because of its undue focus on sugar (as opposed to calories) and because there is no evidence that it will reduce obesity. Consequently, while we're pleased to see the Chancellor acknowledge the efforts made by soft drinks manufacturers to reduce sugar levels in their products, we continue to believe that implementation of the Levy should be paused while such good progress is being made voluntarily.”

Gavin Partington, BSDA Director General, commented on the Budget by saying: “Given current increases in cost of goods, we're 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 are also the only sector with a calorie reduction target for 2020.”

“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.” 

by Elizabeth Kenward

To contact the author of this article, please email elizabeth@cnsmedia.com