UK sets outs plans to change sugar tax

The UK government has recently announced a consultation on proposed changes to the Soft Drinks Industry Levy (SDIL), which was introduced in 2018 as a measure to combat obesity. The new proposals aim to expand the sugar tax to include milk-based and milk-substitute drinks, which were previously exempt from the levy.

According to the HM Revenue & Customs and HM Treasury, the consultation seeks to build on the success of the SDIL in encouraging soft drinks producers to reduce sugar content. The key proposals include reducing the minimum sugar content for the levy to apply, removing the exemption for milk-based drinks, and introducing a ‘lactose allowance’ to account for natural sugars in milk. Additionally, the proposal aims to eliminate the exemption for milk substitute drinks that contain added sugars beyond those derived from the principal ingredient.

Currently, drinks with a sugar content of 8g or more per 100ml are subject to a higher levy rate of 24p per litre. The proposed changes have sparked mixed reactions from industry stakeholders. The Food and Drink Federation emphasized the need for a predictable regulatory environment to support businesses in developing healthier options. They also highlighted the significant reductions in sugar content that manufacturers have already achieved in the past five years.

On the other hand, the British Soft Drinks Association (BSDA) expressed concerns about the proposed changes, calling them unnecessary and potentially damaging. The BSDA spokesperson pointed out the financial challenges faced by industry members, including inflation, rising ingredient costs, and trade tariffs. They warned that lowering the threshold for the SDIL could further hinder businesses’ ability to grow and create employment opportunities.

However, campaign group Action on Sugar welcomed the government’s proposals, stating that they would benefit public health by aligning the levy with current dietary guidelines. They praised the move to reduce the minimum sugar threshold and end exemptions for sugary milk-based and milk-substitute drinks.

The consultation period for these proposals is open until 21 July, and stakeholders can provide feedback online or in writing. The government’s initiative to strengthen the SDIL reflects a continued commitment to promoting healthier choices and addressing the obesity epidemic. This development underscores the importance of ongoing collaboration between policymakers, industry players, and public health advocates to create a sustainable and effective regulatory framework for the food and beverage sector.