The soft drinks industry levy or “sugar tax” to be extended

The Government has just launched a consultation to ‘strengthen the soft drinks industry levy’ (SDIL). 

This was mooted at the Autumn Statement and forms part of the Government’s new approach to ‘prevention’ in its upcoming health plan. 

Officials are consulting on three specific proposals:

1. Reducing the minimum sugar content at which the SDIL applies to qualifying drinks from 5g to 4g (this would capture some drinks that were previously reformulated to fall below the threshold). The SDIL standard rate would apply from 4g to 7.9g total sugar per 100ml, as opposed to 5g to 7.9g total sugar per 100ml currently.
2. Removing the exemption for milk-based drinks. The exemption at risk of being removed applies to milk-based drinks with added sugar and at least 75ml of milk per 100ml. Plain milk and milk-based drinks with no added sugar are not in scope of the SDIL and this will remain the position going forward.
3. Removing the exemption for milk substitute drinks with ‘added sugars’; beyond those sugars derived from the principal ingredient, such as oats or rice.

Therefore, milk substitute drinks and plain animal milks without added sugar, will remain outside the scope of the SDIL – whilst the proposals will bring into SDIL milk-based drinks and milk substitutes with added sugar.  An important point is that drinks with sugars only released from their principal, or ‘core’, ingredient will be out of scope of SDIL, on the basis that they do not have ‘added sugar’. Unsweetened versions may still contain some sugars, which are released during the manufacturing process from the core ingredients.

A key issue will be where there are other added ingredients and what might constitute as an “added sugar”.

‘Added sugar’ includes ‘sugar’ is defined as “(calorific monosaccharides or di-saccharides) or substances containing ‘sugar’. Soft drinks are not treated as containing ‘added sugar’ where the only sugar they contain comes from fruit juice, vegetable juice or milk.”  

If any sugars (as defined) other than the principal ingredients are added then the SDIL thresholds will apply, based on the total sugar content (g) per 100ml. Total sugars include those naturally present or released by the principal ingredient during manufacturing, plus the added sugars.

As a reminder, the SDIL does not apply to drinks that are:

• An alcohol replacement, such as de-alcoholised beer or wine
• made with fruit juice or vegetable juice and do not have any other added sugar
• Liquid drink flavouring that is added to food or drinks like coffee or cocktails ie flavoured syrups
• Sold as a powder
• Prepared by mixing liquids and served in an open container, such as cocktails or mocktails
• Infant formula, follow on formula or baby foods
• Formulated food intended as a total diet replacement, or dietary food used for special medical purposes
• Have an alcohol content of more than 1.2% alcohol by volume (abv)
• As above current exemptions include (i) drinks with at least 75% milk and (ii) a milk substitute, such as soya or almond milk, containing at least 120mg of calcium per 100ml; the consultation aims to remove the current milk substitute exemption (based on calcium content) and bring milk based drinks and milk substitutes (flavoured or plain) with added sugar into the SDIL

The use of tax for so called ‘less healthy’ food has been controversial and rates of calorie reduction have been disputed as obesity rates have continued to rise since the introduction of the SDIL in 2018. It is stated the encouragement for business to reformulate may be the main objective however the use of tax for this purpose sets a concerning precedent.

The consultation closes on 21 July and the Government will most likely take a decision/move forward with proposals at the next Budget.

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