The tax on sugary drinks is about to get a lot broader, with milkshakes brought into line for the first time.
Sugar content in soft drinks collapsed by 46% in the past five years as a result of the levy introduced by Chancellor George Osborne in 2016, according to the Food and Drink Federation.
But there was a carve-out for sugary milk-based drinks like milkshakes and lattes.
The set limit of 5% also led some popular brands to change their recipe to lower their level to just under that threshold.
Some, such as Irn Bru, also gave customers the option of buying a premium version with the original recipe at a higher price.
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In her autumn budget last year, Osborne’s successor Rachel Reeves said she was considering widening it out.
And today, Health Secretary Wes Streeting confirmed it was happening in this year’s budget.
The expansion will take in ‘pre-packaged milk-based and milk-alternative drinks with added sugar like supermarket milkshakes, flavoured milks, sweetened yoghurt drinks, chocolate milk drinks, and ready-to-drink coffees’.
Meanwhile, the threshold for the tax would fall from 5 grams to 4.5 grams of sugar per 100ml.
What is sugar tax?
The sugar tax – properly known as the Soft Drinks Industry Levy – was brought in nine years ago to improve Brits’ health, and raise a bit of money for the government while doing so.
It’s split into two rates: the lower rate for drinks with between 5g and 8g of sugar per 100ml, and the higher rate for drinks with more than 8g of sugar per 100ml.
Those rates jumped up significantly earlier this year. From April 2018 to April this year, the lower rate was 18p per litre and the higher was 24p per litre.
But in spring, the lower rate became £1.94 per litre, while the higher leapt to £2.59 per litre.
Those levies are paid by the manufacturer, but of course, the additional costs are usually added to the price of the drink paid by regular customers.
Why was it introduced?
The most-cited reason for the levy’s introduction was to tackle obesity rates.
According to the NHS, obesity in children aged between 11 and 15 has increased over the past ten years.
But the additional money didn’t hurt either – government statistics released last autumn showed the tax has raised a total of £1.9 billion since it first came into effect in 2018.
But Christopher Snowdon of right-wing think tank the Institute for Economic Affairs called for the sugar tax to be ‘repealed, not expanded’.
He said: ‘It has been costing consumers £300 million 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.’
Which drinks could fall under the sugar tax?
- Frijj chocolate milkshake: 11.4g of sugar per 100ml
- Cadbury chocolate milkshake: 10.3g of sugar per 100ml
- Yazoo chocolate milkshake: 8.6g of sugar per 100ml
- Starbucks Caffe Latte iced coffee: 8.3g of sugar per 100ml
- Arctic Coffee Cafe Latte: 7.9g of sugar per 100ml
- Shaken Udder Vanillalicious: 8.4g of sugar per 100ml
- Jimmy’s Iced Coffee original: 4.9g of sugar per 100ml
- Irn Bru: 4.5g of sugar per 100ml
- Pepsi: 4.5g of sugar per 100ml
- Old Jamaica Ginger Beer: 4.9g of sugar per 100ml
- San Pellegrino Lemon: 4.5g of sugar per 100ml
- Fanta Lemon: 4.5g of sugar per 100ml
- Ribena: 4.3g of sugar per 100ml
- Tango Orange: 4.3g of sugar per 100ml
- Dr Pepper: 4.3g of sugar per 100ml
- Rubicon Sparkling Mango: 4.5g of sugar per 100ml
- Lucozade Orange: 4.5g of sugar per 100ml
When will the changes come into effect?
The Department of Health and Social Care has confirmed businesses will have just over two years to make any changes to their recipes.
They will be taxed the full amount unless they fall below the threshold level by January 1 2028.
What has the reaction been to the announcement?
Today’s news was welcomed by Dr Charlotte Eckhardt, Dean of the Faculty of Dental Surgery (FDS) at the Royal College of Surgeons of England which has called for the threshold to be lowered to 4g of sugar per 100ml.
She said: ‘While today’s announcement does not go as far as we recommend, we nevertheless welcome this change and remain hopeful that it will improve the dental and public health of the nation.’
But shadow Scottish secretary Andrew Bowie criticised the move for its likely effect on ‘Scotland’s national drink’ Irn Bru – despite it being Conservative policy that led to its previous recipe change.
He said: ‘Irn-Bru is an institution in its own right and its practically part of Scotland’s DNA.
‘But now it seems Rachel Reeves is set to push its price up by another 5 per cent. It’s clear that everyone is going to be punished by this budget.
‘Only the Conservatives have a fiscal policy made of girders and a plan to protect taxpayers and, it seems, Irn-Bru.’
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