'Sugar Tax' Begins In The UK

'Sugar Tax' Begins In The UK

'Sugar Tax' Begins In The UK

Martin Hook, managing director of Ayming UK, a business performance consultancy specialising in R&D, says that over the last two years manufacturers have been trying to assess how best to balance reformulation costs with tax costs.

"Introducing the sugary drinks tax is a great start, but is no silver bullet to tackle childhood obesity".

The price of high-sugar soft drinks in the United Kingdom is set to rise by up to 25% under the newly introduced "sugar tax", in a bid to prevent obesity and related diseases, such as diabetes and certain cancers.

Fruit juices will not be taxed as they don't contain added sugar, and neither will drinks with a high milk content. Professor Nava Ashraf, from the London School of Economics, is a leader in the field of behavioural economics. Soft drink companies have been engaged in a range of calorie reduction initiatives for many years - resulting in a 19 per cent reduction in sugar intake (from soft drinks) since 2013.

How much is the tax?

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The sugar tax adds 18p per litre on drinks that have a total sugar content of 5-8g per 100ml - a sugar content of 5-8%.

Yearly sales of sodas in Mexico declined 6 percent in 2014, after the tax was introduced (Wall Street Journal). "Customer experience is more important than ever, so aim to offer innovative soft drinks, lower in sugar but perfectly served, to stand out from the crowd".

Funds raised by the tax in England are to be put into sports and breakfast clubs at schools. This could also increase their prices in pubs and restaurants too. The likes of Lucozade, Ribena and Irn-Bru have already changed their recipes so that they fall outside of the taxable thresholds.

I don't know what the scale of sugar tax avoidance is likely to be, it really depends on how it is sold and the routes to market. Nearly a third (31pc) report being unsure of which food and drink items are actually high in sugar. "As that has happened, obesity rates have continued to rise". "This sustained attack over a number of years has had a big impact on how consumers view this now demonised ingredient, what they think constitutes healthy food and their eating and buying habits".

The introduction of the levy means the United Kingdom joins a few countries, including Mexico, France and Norway, have introduced similar taxes.

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