Is the taste of YOUR favourite drink about to change? Sugar tax extension 'will force recipe tweaks' - with Pepsi and Irn Bru among those now in the firing line
The Treasury has confirmed plans to extend the soft drinks industry levy (SDIL) to milkshakes and other dairy-based drinks.
It has also proposed reducing the maximum amount of sugar allowed in drinks before they become subject to the levy from 5g to 4g per 100ml.
The toughened rules are set to impact a whole swathe of drinks on sale in supermarkets, including Pepsi, Ribena, Fanta and Starbucks caffe latte iced coffee.
The Government suggested the changes, which have been put out to consultation, would see manufacturers continue to further reduce sugar in their recipes.
But industry figures hit out at a 'muddled and damaging shifting of the goalposts' that would have 'questionable positive health outcomes'.
Chancellor Rachel Reeves said in her Budget in October that Labour would consider broadening the tax, which was introduced by the Tories in 2018 as part of anti-obesity efforts.
In a consultation document published yesterday, the Treasury said the latest analysis showed there were 866 products with between 4g and 4.9g of total suger per 100ml.
There are 203 pre-packed milk-based drinks on the market, which make up 93 per cent of sales within the category, with a total sugar content of 5g or above per 100ml.
These are all likely to be hit with the tax under the new proposals unless their recipes are altered to reduce sugar content.
As a result of widespread reformulation after the initial announcement of the SDIL, 89 per cent of fizzy drinks sold in the UK do not pay the tax, the Treasury added.
The exemption for milk-based drinks was initiall=ly included because of concerns about calcium consumption, particularly among children.
But the Treasury said young people only get 3.5 per cent of their calcium intake from such drinks, meaning 'it is also likely that the health benefits do not justify the harms from excess sugar'.
'By bringing milk-based drinks and milk substitute drinks into the SDIL, the Government would introduce a tax incentive for manufacturers of these drinks to build on existing progress and further reduce sugar in their recipes,' it added.
Fizzy drinks such as Old Jamaica Ginger Beer, Lucozade Energy Original, Pepsi, Rubicon Sparkling Mango, and San Pellegrino Limonata all contain more than 4g of sugar per 100ml.
Meanwhile, Starbucks Caffe Latte Iced Coffee and Muller Frijj Chocolate Milkshake are also likely to fall foul of proposed new rules for dairy-based drinks.
These are set to take account of the average lactose content of semi-skimmed milk, which is 4.8g lactose per 100ml.
The Treasury set out how a drink containing 75 per cent milk will get an allowance of 4.8g x 75 per cent, which equals 3.6g per 100ml.
This lactose allowance would then be added to the SDIL threshold of 4g per 100ml, which gives a total of 7.6g of total sugar per 100ml.
Christopher Snowdon of the Institute of Economic Affairs said: 'The sugar tax has been such a dramatic failure that it should be repealed, not expanded.
'It has been costing consumers £300million a year while childhood obesity rates have continued to rise.
'To claim it has been a success on the basis of a hypothetical reduction of one calorie a day is absurd.
'Sugar taxes have never worked anywhere. What happened to Sir Keir Starmer's promise to not raise taxes on working people?'
A spokesperson for the British Soft Drinks Association said: 'This decision is a muddled and damaging shifting of the goalposts which risks undermining years of reformulation investment with questionable positive health outcomes.
'More than seven out of every 10 soft drinks sold in the UK are low or no sugar and the total sugar removed from soft drinks between 2015 and 2024 is just under three quarters of a billion kilograms.
'Lowering the SDIL threshold to 4g – on top of the previously-announced, backdated 27 per cent increase to the levy – comes at a time of major and unprecedented financial headwinds for our members, from record-high inflation and NIC increases, to spiralling ingredient costs and incoming trade tariffs.
'Such cost increases have already impacted our members' ability to grow their businesses and boost employment, and the lowering of the SDIL threshold risks making this even more challenging.'
A spokesperson for the Food and Drink Federation said: 'We welcome the opportunity to input to the Government's consultation on the SDIL, to share our sector's views and technical expertise.
'Soft drink manufacturers have already made significant progress reducing the amount of sugar in their drinks, including milk-based drinks.
'Thanks to many years of investment in research and development, manufacturers have reduced sugar in drinks that are subject to the levy by 46 per cent in the last five years.
'Significant progress has also been seen in pre-packed milk-based drinks, which are not subject to the levy, with a 30 per cent sugar reduction in the last three years.
'Food and drink manufacturers are facing a series of inflationary pressures and government must continue to create the right conditions for businesses to innovate and also be clear about their long-term goals to promote business confidence.
'A predictable regulatory environment is vital to ensuring our sector can continue to invest in developing healthier options.'
Dr Hannah Brinsden, of The Food Foundation, said: 'SDIL has been a major public health success, removing tonnes of sugar from soft drinks and in turn our diets, while also raising money for children's health.
'It's only right that we keep ensuring it is working as well as possible; removing exemptions on milk-based drinks and changing the sugar thresholds where the tax is paid are two important improvements.
'However, sugar in our diets comes from a range of food, not just soft drinks.
'If the Government is serious about improving diets, our health and the economy, they're going to need to be more ambitious and consider extending SDIL to food as the next step.'
The Government consultation on the plans will run from Monday until July 21.
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