A sugar tax for health?
The Soft Drinks Industry Levy (SDIL) comes into effect from April 2018, taxing the amount of sugar that drinks manufacturers use in their products. What are the implications for business, health and your favourite sweet treats?
A huge part of the drive to reduce sugar is for health reasons - while the government and health organisations can advise sugar reduction to fight obesity, diabetes and the myriad of associated problems that increase pressure on public services, it is much more difficult to legislate 'healthy behaviour'.
Former Chancellor, George Osborne, floated the tax in 2016 as part of steps to reduce sugar consumption, by targeting the producers of high sugar items.
It has been suggested that producers will respond in one of three ways: recouping costs by passing higher prices on to the consumer, reducing sugar, or increasing production and promotion of less sugary drinks.
Sugar is already starting to go down
AG Barr, the brand famous for carbonated drinks like Irn Bru and Tizer, is one of the affected companies and is already trying to reduce the sugar content of its signature beverage.
A stock market announcement earlier this year revealed the aim to have 90% of AG Barr products contain less than 5g of sugar per 100ml by Autumn 2017; more than halving the amount currently in Irn Bru.
These kinds of measures will help companies exempt themselves from both bands of the taxation in the SDIL: a lower rate for drinks that exceed 5g per 100ml and a higher one for sugar content over 8g per 100ml. Coca-Cola and Pepsi, for example, are both currently eligible for the higher rate.
Pure fruit juice and milk-based drinks are exempt, as are the products of some smaller companies.
While soft drinks have thus far been the focus of sugar-reduction measures, snacks and sweets may also soon come under inspection as campaigners call for their inclusion. Swiss company Nestlé, parent brand of KitKat and Quality Street, has also pledged to reduce its use of sugar by 10% by 2018.