Britvic Ireland’s responses to the Minister for
Finance’s questions on the proposed tax on
the production and importation of sugarsweetened drinks (“SSDs”)
3 January 2017
Britvic Ireland
Key Concerns
Britvic Ireland recognises the growing problem of obesity and weight-related diseases in Ireland. We
are fully committed to playing our part in helping to address the issues and have been doing so for
many years through product reformulation, innovation, portion control and clearer labelling. We are
the largest no/low sugar soft drinks business in the Republic of Ireland (“ROI”) market and offer
consumer choice across our portfolio and within key brands.
Obesity has many causes and requires a whole-of-society approach to tackle effectively and
sustainably. We don’t believe that a single measure, taxing some soft drinks products with added
sugar, which account for c. 3% of total population calorific intake, will be effective. We favour a
voluntary approach, working with Government, within the comprehensive framework of A Healthy
Weight for Ireland 2016-2025, the recently published National Obesity Policy and Ten Step Action Plan.
We accept, however, that a tax is going to be introduced. We are not in a position to absorb the tax
and will pass it on in higher pricing.
Britvic Ireland, which employs over 500 people, is by far the largest manufacturer and bottler of soft
drinks based in the ROI and given the differences in our value chain compared to companies who
bottle soft drinks outside the State, we have particular concerns about the potential workings of any
proposed tax. Specifically:
1. Level-Playing-Field Domestic versus Imported Products
Over 70% of the soft drinks sold in ROI are imported, compared to just 10% in the UK. So, if the
proposed tax is not levied equally on imports (70%) and domestically manufactured and bottled
product (30%), taxation revenues will not be optimised, and imported products will gain a price
advantage in the marketplace. Britvic Ireland accounts for over 90% of the domestically bottled
soft drinks in the Republic and we would therefore be disproportionately disadvantaged should a
level-playing-field between domestic product and imports not exist. Let’s not make a tax on added
sugar become a tax on Republic of Ireland jobs.
2. Cross-Border Trade
Should the tax rate in ROI be higher than that in the UK, this will most likely generate more crossborder trade in soft drinks, threatening Irish jobs and potentially reducing sugar tax and VAT
receipts in the Republic. This is particularly concerning given the uncertainty caused by the Brexit
vote in the UK, and the volatility in euro/Sterling rate.
1
Britvic Ireland
3. Administrative and Cash Flow Burden on Businesses
We are concerned regarding the pressure on cash flow should we be required to pay the tax in
advance of products being sold. We also recognise that levying the tax at point-of-sale may cause
retailers, publicans and foodservice operators additional administration and cost.
4. Set-Up Costs and Lead Times
The more complicated the eventual tax mechanism, the more time we will need to change our
systems in order to pay it. We estimate this could take up to a year, depending on the mechanism.
It would make sense to use an existing taxation mechanism e.g. the carbon tax model, to
administer the proposed tax on sugar-sweetened-drinks thereby minimising lead times, set-up
costs and additional administration burden.
We agree with the principles defined in the Irish Beverage Council’s submission that the proposed tax
should:

Include clear, measurable and specific definitions and common understandings

Not impose undue administration or cash flow burden on business

Apply equally and consistently to all producers and importers
We also agree with the Irish Beverage Council’s view that in the spirit of good governance, any
legislative proposal must include a review and sunset clause where aims are not met. The aims of the
tax need to be made clearer to enable an objective evaluation of its impact.
Britvic Ireland Overview
Britvic Ireland holds the number two position in the ROI soft drinks market with a 25% volume market
share (Nielson Scantrack MAT to 30 October 2016). We have two manufacturing and bottling facilities
in ROI – in Kylemore Ballyfermot in Dublin, and Newcastle West in County Limerick. We are by far the
largest manufacturer and bottler of soft drinks in ROI. 97% of the soft drinks Britvic Ireland sells in the
Republic of Ireland are made in the aforementioned two facilities. The number one player by volume,
Coca-Cola-Hellenic (CCH), with a 30% market share, and the number three player, Lucozade Ribena
Suntory (LRS), with a 6% market share, both manufacture and bottle outside the Republic of Ireland
(Nielson Scantrack MAT to 30 October 2016).
Britvic Ireland exports to Northern Ireland, Great Britain and USA from our factory in Ballyfermot.
2
Britvic Ireland
A Proud Heritage of Innovation & Health
Britvic Ireland was formed in August 2007 when Britvic PLC, a FTSE-250 company, headquartered in
London, acquired the Soft Drinks Division of C&C Group. The business that we call Britvic Ireland today,
dates back to 1773 and the invention of Soda Water by Augustine Thwaites Junior in the medical
laboratory in Trinity College Dublin. This makes our business the longest established soft drinks
business in Ireland and one of the oldest in the world. We are the proud brand owners of iconic Irish
brands such as Ballygowan, MiWadi, Club, TK and Cidona.
Health is very much part of our heritage and our commitment to inventing and innovating a broad
portfolio of soft drinks that can be enjoyed by consumers continues to this day. A combination of
product reformulation (taking sugar levels down), launching new products (with a bias towards low
and no sugar), re-shaping our marketing investment towards low and no sugar products, and
investment in clearer and more consistent labelling (front-of-pack guideline-daily-amounts) has
underpinned our growth in recent years to become the number one no/low sugar soft drinks business
in the Republic of Ireland market.
We are founding members of Love Irish Food, an organisation that aims to help shoppers make
informed choices about buying Irish manufactured food and drinks. Its overall aim is to safeguard the
future of food and drink manufacturing in Ireland.
We are also verified members of Bord Bia’s Origin Green Sustainability programme, demonstrating
our commitment to our environment, consumer health and our communities, and to conducting our
business responsibly and sustainably.
3
Britvic Ireland
Britvic Ireland’s responses to the Minister for Finance’s
questions on the proposed tax on the production and
importation of sugar-sweetened drinks (“SSDs”)
Question 1 – The tax will apply to water-based and juice based drinks with an added sugar content
of above 5 grams per 100ml. It will not apply to milk-based drinks. Are there drinks on the market
which do not fit neatly into these categories, which may be of concern for producers from a
compliance point of view?
The consultation document doesn’t provide detailed definitions of added sugar, pre-packaged drinks
and where/how the tax will be levied, therefore it is a challenging question to answer. However,
logically, all sugar-sweetened drinks should be considered to achieve the stated health objective.
We fully support liquid milk being excluded from any potential tax, and recognise the health benefits
it provides. However, there is no justification on public health grounds to exempt all milk-based drinks
with added sugar from the proposed tax. Currently 18.3 million litres of Flavoured Milks and Drinking
Yoghurts are consumed in Ireland each year (source: Canadean Republic of Ireland Soft Drinks Market
Insights 2016). Many of these drinks have high levels of added sugar.
To illustrate, here are some examples from visits to Dublin stores on 21 November 2016:
Product
Sugar ingredients listed
Sugar / 100ml
Branded Fresh Banana Milk
Sugar, Fructose
10.2g
Branded Raspberry flavoured Yogurt
Sugar 6%, Glucose-fructose syrup
11g
Drink
3.28%
Branded Frappucino Coffee
Sugar (6%)
10g
Not introducing a levy on milk-based added sugar drinks could therefore encourage further switching
to a product that has the same or more sugar in it, which could lead to an increase in the consumption
of sugar from soft drinks, and gives a bewildering and inconsistent message to the consumer.
Further, it would appear to give a “double-advantage” to added sugar milk-based drinks when one
considers the fact that such milk-based drinks (where the milk element represents 50% of the volumes
in a drink, which is the case for example with all the milk based drinks listed above) are charged at a
4
Britvic Ireland
Zero rate of VAT 1 , and therefore gives absolutely no incentive to manufacturers of these products to
reformulate. This is unfair on the consumer and on producers of water-based soft drinks.
There are also drinks on the market that could be interpreted as neither juice nor water based, but
are essentially soft drinks with added sugar. To illustrate, currently on the market there are soya, aloe
vera, green tea based drinks, and, drinks based on a blend of milk and water.
We conducted extensive research with Irish consumers on their attitudes to sugar during October
2016, and it is very clear that consumers are already confused about sugar; the appropriate amount
to consume, sources and types of sugar, etc. It is therefore our view that excluding the drinks above
from a sugar tax would add to that confusion.
We recommend including all soft drinks with added sugar in scope, whatever the liquid base, including
dairy-based sugar-sweetened drinks. We also recommend introducing a clear, easy to understand
labelling system to help consumers make informed choices.
Question 2 – Naturally occurring sugar will not be included within the scope of the tax. Do producers
have the mechanism for identifying and declaring the added sugar content as opposed to the
naturally occurring sugar content of their drinks?
Yes. We can identify the levels of added sugar and sugar coming from fruit (naturally occurring) within
our data capture system, and are fully compliant with EU labelling requirements.
Question 3 – It is intended that the tax will be collected at first point of import or production. What
compliance issues does this present for producers?
There are practical issues in applying the tax at the point of production. It does not take account of
how to deal with waste, spillages, quality control issues, faulty packaging or labelling, or damage.
Furthermore, levying the tax at point of production i.e. before a product has been sold would put
pressure on cash flow.
Soft drinks is not a controlled supply chain (unlike alcohol or tobacco)
There are particular challenges in applying the proposed tax given that soft drinks is not a controlled
supply chain.
1
Section: 46(1)(b) Schedule: 2 Paragraph: 8(1) of Value-Added Tax Consolidation Act 2010 (VATCA 2010)
5
Britvic Ireland
If we look at the application of excise taxes in the alcohol industry, a controlled supply chain, no tax is
applied until the alcohol is placed on the Irish Market and delivered to the customer e.g. retailers, off
licenses, pubs. Returns are submitted based on release of the product from factory and tax is paid on
this basis. If the alcohol is exported or transferred in bond to a bonded warehouse facility in the State,
then the product can be moved under control with no duty payable. Alternatively, the duty can be
paid in the State and reclaimed if the product is exported.
If we apply to Irish Production of soft drinks the tax would most easily and logically apply on the basis
of supply to the customer – retailers, off licenses and pubs. The records are already in place via the
producer’s sales system and vat returns. The sales invoice is also likely to have the stock-keeping-unit
(SKU) details i.e. which added sugar products and the quantities supplied, to aid verification.
Therefore, the additional administrative cost is reduced.
The UK sugar tax consultation process appears to be moving in the same direction, i.e. away from
levying the tax in factories towards ‘first supply in the territory’.
Over 70% of soft drinks sold in ROI are imported
In terms of effective administration of the tax, with more than 70% of the sugar-sweetened-soft drinks
market imported into ROI, as the largest bottler of finished soft drinks located in ROI, our biggest
concern is that the tax must be levied fairly and with equal rigour across domestically bottled (30%)
and imported products (70%). Only levying the tax in the domestic factories, of which Britvic’s facility
in Kylemore, Ballyfermot in Dublin is by far the largest in the State, we estimate would generate less
than 30% of the planned taxation revenues and would create price advantage for imports over
domestic products.
There are two types of “imports” which need to be taken into account:
a)
“Imports” from within the EU
b)
Imports from outside the EU
There are currently no control mechanisms for managing the import of goods from within the EU,
other than through VIES returns. Again we look at alcohol as the closest example, the control on
imports is through the EMCS system, an excise system whereby the Customs Authorities are notified
of the departure and arrival of all alcohol products and they can monitor this accordingly. This will
not be the case for sugar sweetened soft drinks which is not a controlled supply chain.
6
Britvic Ireland
An additional complication is the control on goods moving North to South on the Island of Ireland.
Unless an “importer” voluntarily chooses to self-declare the “import” of soft drinks there is no control
mechanism which can be applied by Customs.
However, if the levy is charged on the first supply of those soft drinks in the State then the purchaser,
by virtue of its purchase records and vat on receipts can provide a control mechanism. This is a more
controllable tax system.
If we look at imports from outside the EU this can be controlled through the Import Declaration System
– AEP and SADs – but only if the levy is applied on the import declaration. As the SAD is an EU
harmonised document there is no facility for this option.
An additional difficulty in control may arise if there is a relief for small producers. How will this apply
or be controlled? What if imports are broken into smaller amounts?
As a result of these complications it appears that the UK tax authorities are looking to apply the tax
on the first UK receipt of the goods i.e. the first point of supply in the territory.
We also need to look at the impact of Brexit. Assuming the UK exits the EU Single Market this will likely
take place around the same time as the proposed implementation of the sugar levy. At present the
implementation of new Customs Controls on cross-border trade will take up all available resources.
The addition of a sugar levy to be applied at the border will be almost impossible – both in terms of
the additional requirements for Customs Officers and increasing pressure on the Customs systems
(AEP).
The risk of grey and black market imports will increase considerably, as is currently the case even in
the controlled excise arena of alcohol, oil and tobacco.
Soft drinks customer base in ROI is highly-fragmented
Levying the tax at point of sale would also be problematic given the fragmented nature of the ROI
customer base in retail, on-trade and foodservice and would be complicated administratively. Also
different VAT rates other than the standard rate have already been deployed in ROI, and under EU
rules new additional rates may not be available as a means to levy the proposed tax on certain sugar
sweetened beverages.
7
Britvic Ireland
Summary
We are not in favour of levying the tax at point of production or point of sale, for the reasons outlined
above. We suggest ‘the first point of supply within ROI’ as the optimal approach from the perspective
of efficiency, fairness and minimising burden on businesses. We would recommend leveraging an
existing mechanism thereby reducing burden and cost of set-up and ongoing administration e.g. the
carbon tax mechanism.
Question 4 – The tax will apply to pre-packaged drinks products only. This presents difficulties in
relation to drinks which are intended to be consumed as a diluted level. Is there scope to declare
the sugar contents of these particular products at their intended consumption levels, at the early
point of import or production?
In the absence of any clarity on the term “pre-packaged drinks” it is challenging to give details. Also,
we must recognise that there is no common understanding of “intended consumption levels”.
All cordials and dilutable products have clear labelling on them to advise consumers of the correct
dilution ratio to give the optimum drinking experience. Dilution is worked out according to product
quality and taste, and if a manufacturer gets a dilution ration wrong, then consumers simply do not
buy the product.
However, different products have different dilution ratios – e.g. MiWadi Mini (diluted to a ratio of
20:1), our market leading pocket-sized squash, is obviously much more concentrated than regular
MiWadi squash (diluted at 4:1) – and we also sell MiWadi at double-concentrate (diluted at 9:1).
Therefore, each product – despite being part of the MiWadi brand – has different dilution ratios.
Each of these products complies with EU Labelling requirements, which includes the amount of added
sugars per serve if diluted to the recommended level on pack.
It will be very important to critically evaluate any products with non-standard dilution ratios to prevent
abuse, and should also monitor whether producers change on-pack recommended dilution without
changing ingredients, simply to avoid paying the tax.
Again, without clear definition of the term ‘pre-packaged’, we are left wondering if ‘post-mix’ or
‘dispense’ is included in the scope of the proposed tax. ‘Post mix’ (or ‘dispense’) refers to soft drinks
served from a drinks dispenser, for example, at a cinema where you order a cup of a soft drink. These
drinks are dispensed in a variety of cups, some branded with product information, and some branded
with the name of that cinema, or quick serve restaurant, for example.
8
Britvic Ireland
Space must be allowed for industry innovation to help reduce packaging and water use, like increased
concentration. Any tax would need to include tolerance for changes in dilution rates.
Question 5 – What do respondents consider to be an ‘added sugar’? What would they define as
necessary to include in this definition in order to cover the types of sugars typically added to soft
drinks?
A pre-consultation to define ‘added sugar’ and other terms used in the consultation document would
have been helpful and allowed submissions to be fuller.
To be constructive, in line with the Irish Beverage Council, Britvic Ireland is suggesting that the sugar
definition in EU REGULATION (EU) No 1169/2011 forms the basis of a definition of added sugar as all
monosaccharides and disaccharide, but excludes polyols.
We are strongly of the view that any legislative proposal for this proposed tax expressly state that all
non-calorific sweeteners are exempt from consideration, including those derived from sugar, to
indicate the permissibility of these ingredients.
We are happy to work with government in this area.
Question 6 – If you are a very small producer of SSDs, what concerns do you have regarding being
included in the SSD tax?
We understand the Government’s desire to reduce regulation on small businesses. However, if the
intent of this policy is to reduce sugar consumed in soft drinks, then excluding small businesses could
have the perverse effect of giving consumers a financial incentive to switch to products with higher
sugar content, which would run counter to Government objectives.
It is also important to define very clearly what constitutes a small producer. For example, does this
include large-scale manufacturers of other products that also produce a small volume of soft drinks?
There are companies in Ireland engaged primarily in dairy or juice manufacture that also produce a
relatively small volume of soft drinks.
To avoid consumer confusion, we believe that soft drinks with added sugar should be included in the
scope of the tax regardless of the size of production facility.
It is equally important to define how importers of soft drinks, both branded and private label,
produced by small producers outside the Republic of Ireland will be treated for tax purposes.
9
Britvic Ireland
Question 7 – In relation to milk-based drinks, should there be a minimum milk content in order for
a drink to be defined as milk-based?
As stated in Question 1, we fully support liquid milk being excluded from any potential tax, and
recognise the health benefits it provides. However, there is no justification on public health grounds
to exempt all milk-based drinks with added sugar from the proposed tax.
Question 8 – Are there particular cross-border issues that you envisage will exist if the Irish SSD tax
does not closely align with the UK soft drinks industry levy?
Without the detail of the UK’s future trading relationship with Ireland and the EU generally in the
context of Brexit, it is virtually impossible to envisage all the issues that will exist. The imposition of an
extra layer of administration that could include registering for export credit to avoid double SSD
taxation, as well as registering and reporting for a SSD tax itself, before it is even known if the UK will
continue to be part of the Customs Union, poses a significant threat to cross-border trade.
1) Grey market: there already exists a sizeable market for soft drinks purchased outside the state
(primarily but not exclusively from Northern Ireland and Great Britain) with the intention of
consumption within the state. Any significant gaps (in level, timing, bands, etc.) between Irish and
UK SSD taxes could increase this volume of cross-border shopping. Not only would this have
negative consequences for the government tax take, but the primary objective of a reduction in
sugar consumption could be impacted as “full sugar” drinks could be available at cheaper price
points for cross-border shoppers.
2) Imports: imports account for approximately 70% of soft drinks sales in the state. It is essential that
the tax mechanism capture these imports comprehensively or risk a) a significant hole in tax take
and b) the sugar consumption reduction objective not being met. Additionally, it should be stated
that many brands have different formulations across the globe, i.e. imported product will often
contain more sugar than that which is in the domestically produced product, despite being the
same brand.
3) EUR/GBP Exchange rate: as it stands today the strength of the Euro vs Sterling is a significant push
factor for cross border shopping. In a scenario where Sterling is weak and the UK SSD tax is lower
than the Irish version then we can expect an even higher rate of cross border purchases. Again,
this would both negatively impact the state’s tax take and make “full sugar” drinks bought in
Northern Ireland comparatively cheap.
10
Britvic Ireland
4) Black market: If the differential between Irish and UK SSD taxes is significant then the temptation
for intermediaries to illegally import (i.e. avoid Irish SSD tax) inherently cheaper product from
outside the state will be heightened. Whilst we recognise that the scale of the potential black
market is not of the same order as tobacco or alcohol, the requirement for the legal enforcement
of the tax is very real and needs to be specifically addressed.
5) Brexit: with the current uncertainty around how the border between Ireland and Northern Ireland
will operate in the future it would be remiss of us not to point out that any future changes to
border arrangements may require some reworking of the tax to suitably accommodate those
changes.
For the tax to be effective there needs to be an adequate and proportionate enforcement regime. As
the consultation document does not set out the detail for compliance and enforcement it is difficult
to answer the cross-border aspect of this question.
Question 9 – How integrated are the production systems for soft drinks across borders in the UK
and Ireland? Does the cross-jurisdictional nature of production of soft drinks present particular
difficulties to producers?
The soft drinks supply chain is highly integrated across the Republic of Ireland and the UK with more
than 70% of the Republic of Ireland sugar-sweetened-soft drinks market imported. Of the big three
soft drinks companies, CCH and LRS bottling-plants supplying the Island of Ireland are in Northern
Ireland and Great Britain respectively, with Britvic’s located in Dublin bottling the Britvic and Pepsico
brands serving the Island of Ireland. All three companies produce for the Republic of Ireland from
three distinctly different geographies.
The integrated supply chains and cross-jurisdictional nature of soft drinks production is in the context
of other parts of the value chain crossing both countries, meaning intermediaries can choose whether
to source from one jurisdiction or another. The big retailers operate in both the Republic of Ireland
and the UK notably Tesco, Musgraves, Dunnes, BWG and Costcutter; similarly, Licensed Wholesalers
such as C&C Gleesons and Counterpoint operate on an Island of Ireland nature, as do many
foodservice operators.
The challenges of such high integration for soft drinks producers are:

Exposure to Euro-Sterling fluctuations

As yet unknown implications of Brexit re free movement of goods
11
Britvic Ireland

Potentially two different mechanisms on the Island of Ireland for tax on sugar-sweeteneddrinks

The combination of two or more of the factors above
Should the tax on sugar-sweetened-drinks be levied in such a manner in ROI and as to advantage
imports this will put jobs at risk in ROI.
Question 10 – Is there a system whereby producers can track their individual products, for example
in the case of a product recall being necessary? Would it be possible to integrate this system with
the SSD tax, to allow the Revenue Commissioners to audit whether products for sale to the
consumer have been subject to the tax?
We have a robust product tracking system and comply with all legislative requirements. However,
there is no pan-industry system that would allow Revenue to audit no / low / medium / regular sugar
products. Without further details of the auditing process we cannot speculate on how the systems
might be integrated. We are willing to engage with the Department and Revenue to develop tracking
and audit systems.
Question 11 – More broadly, do you have any concerns from a health perspective about which
products are included and excluded by the scope of the tax?
Soft drinks make up just 3% of our daily calories, meaning the tax completely disregards 97% of
calorific intake. This poses a significant problem in achieving the stated health aims of the tax.
As mentioned in the response to Question 1, we believe sugar sweetened dairy based drinks should
be included in scope, for clarity and consistency purposes. We also believe this would be more
consistent with the updated Food Pyramid guidelines published by the Department of Health in
December 2016: people are advised to consume three servings a day of milk, yogurt or cheese (five if
aged between nine and 18 years) where one serving is equivalent to one bottle (200ml) of yogurt
drink, or one glass (200ml) of milk. People are advised to check the label, as some yogurts and yogurt
drinks can have added sugar, inferring sugar sweetened versions of these drinks should be consumed
less frequently. Source: Safefood; healthy food for life, 6 December 2016
Question 12 – Producers may be required to provide regular documentation to verify the added
sugar contents of their produce to the Revenue Commissioners. We anticipate that this information
will already form part of industry production methods. How costly a task would this be for
producers?
12
Britvic Ireland
Without clear definition of “added sugar” it is difficult to assess. However, as the sole large-scale
manufacturer in ROI, Britvic Ireland’s primary concern is that there is a level playing field for both
domestically produced and imported drinks with testing through the same facilities.
It is important to state that naturally occurring and added sugars once blended together are
impossible to distinguish. This raises several issues – such as the integrity of the data from the
importers/producers and the Revenue’s ability to verify such data. This is something that the
government will need to clearly address, should a tax be introduced, to ensure that there is no
discrimination between domestic manufactured beverages and imported beverages.
Question 13 – Those who are liable to pay the tax will be required to register and submit returns.
Are respondents aware of any data sources that can be relied upon to support compliance and/or
reduce administration burden on businesses? (e.g. traceability records)
With no details provided in the consultation document of what is required to register / submit returns
and no details of the test and tracking required we are unable to comment on compliance and the
administration burden, other than to say domestic manufacturers should not be burdened, putting us
at a disadvantage to those who manufacture outside the state.
Question 14 – Are there circumstances where soft drinks may become spoiled or unfit for use after
the bottling process and if so, can producers advise the extent that this occurs and the quantities
involved?
Product may become spoiled in many ways:

Packs may be under-filled and not be packaged for sale

Packs may become damaged during the production process

Product may not reach quality standards & be scrapped

Packs may become damaged during warehouse storage

Product in warehouse may exceed its best before or shelf life & be scrapped

Shops may hold stock past its best before date and return it

Product recalls

The testing of reformulated or new products inevitably leads to trial-and-error waste.
Potential taxation on these products would discourage reformulation and innovation.
13
Britvic Ireland
Given that the proposed tax is focused on consumption outcomes, rather than manufacturing, it
would be appropriate for the tax to take full account of spoiled product that did not reach the
consumer.
Question 15 – Are you involved in any export or re-export trade in soft drink or SSD and if so, do you
see any difficulties posed to those transactions?
Exports account for a material percentage of the total product manufactured by Britvic in ROI and play
an important role in underpinning our cost base, employment levels and investment in ROI. This
product is exported principally to NI and Great Britain.
Re-export is far less significant within our business model. The current requirement for re-export is
limited to agency and competitor brands sold through our Counterpoint Licensed Wholesale business.
Maintaining and growing an export business from ROI to NI and Great Britain will be particularly
challenging going forward in the context of Brexit and its first order impact of a weakening Sterling
versus euro exchange rate.
If the proposed tax on certain sugar sweetened beverages is levied in a way that drives a price
differential between ROI and the UK, or favours imported beverages into ROI over domestically
bottled product, or results in taxation on exports from ROI, then the challenges facing our export
business will be exacerbated with the consequent pressure on cost, employment and investment in
ROI.
Question 16 – What ‘black-market’ or other tax evasion activity do you consider might be directly
caused by introducing a SSD tax?
Over 70% of sugar-sweetened soft drinks in the ROI market are imported. As the Irish Beverage Council
highlighted in its pre-Budget submission questions remain as to how the movement of soft drinks into
and out of the State would be controlled.
Whilst we support the free movement of goods across the EU, there is the complication of Brexit and
its implications for movement of goods between ROI and Northern Ireland. Movement of goods
requiring a voluntary declaration and self-assessment is potentially open to abuse and we are
concerned of the increased risk of cross-border smuggling and the sale of non-controlled products in
the State.
14