UK and Ireland to enforce sugar tax starting April

UK – The UK and Ireland governments’ separate proposed sugar tax policy on soda and fizzy drinks is set to be effected April, termed as the Soft Drinks Industry Levy in the UK.

According to the two governments, a number of products that will be exempted from the tax include dairy drinks with at least 75% milk, thanks to their nutritional value, pure fruit juices irrespective of their added sugar content.

Others exempted in the UK are alcohol substitute like de-alcoholised wine or beer, infant formula or baby food product and generally small businesses selling less than 1 million litres of product a year.

While rates and exemptions of the Irish tax are similar, it includes two taxable bands for drinks with 5g and 8g of sugar.

In Ireland, the tax dated to be enforced on April 6, was announced in last October’s Budget and includes a 30c on a litre of drinks with 8 grams of sugar per 100 millilitres.

The levy rates were announced by Chancellor Philip Hammond with an expectation to have 40% of affected drinks reformulated by the introduction of the levy.

The tax applies to any soft drink with an alcoholic content lower than 1.2% ABV that is ready-to-drink or ready-to-dilute, packaged for sale.

Beverages that contain at least 5g of added sugars per 100ml of ready-to-drink or diluted product will be subject to the tax.

The final levy rates of 18 pence per litre and 24 pence per litre for the two sugar bands at 5g/100ml and 8g/100ml respectively aims to address child obesity, which has cost UK economy between US$33-57 billion.

Since the announcement in March, major beverage companies including Tesco, Lucozade-Ribena-Suntory and AG Barr have accelerated their reformulation work to cut sugar ahead of introduction in April 2018.

Ahead of the implementation of the sugar tax, Coca-Cola revamped Sprite as a completely no-sugar and no-calorie soft drink in the Netherlands to add to its no-sugar options in the Coca-Cola range, Coca-Cola Zero Sugar and Diet Coke.

In Ireland, Coca-Cola HBC has embarked on extensive reformulation of its drinks over the past two years exempting the majority of the company’s portfolio from the looming government tax on sugar-sweetened drinks.

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