The Soft Drinks Tax
Gareth Barrett, BSDA
Background
• ‘Soft Drinks Industry Levy’ – in effect a Soft Drinks Tax - announced
unexpectedly in March Budget, despite consistent message from No.10
that no action expected ahead of Obesity Strategy in July.
• Levy currently slated for introduction in Finance Bill 2017 for 2018
implementation, with consultation beginning in July 2016.
• Government target to raise around £500m per year - which despite the
Chancellor’s announcement is not directly linked to funding school
sport.
• Office for Budget Responsibility indicates that inflation will jump above
the Bank of England’s target in April 2018 – this will cost the
Government £1 billion (or two years of proposed revenue).
The Government’s proposals – what we know
• A tax on manufacturers and importers of soft drinks within two sugar content thresholds 5g to 7.9g per 100ml and 8g+
per 100ml
• Office for Budget Responsibility suggest that this will be at 18p per litre and 24p per litre to hit Government financial
targets.
• Fruit-based drinks with no added sugar will be exempt, as will all milk-based products.
• Dilutable and post-mix products will be included, at recommended dilution rates.
• Exemption for ‘smaller’ producers and importers.
• Drinks for direct export will be excluded.
• It is a manufacturer levy not a product or brand holder. This means the same product, produced in different locations or
by different bottlers may be treated differently.
• In effect - a model is being designed which can apply to any food or drink category.
Better opportunities
• There is no international evidence to suggest that tax has a sustained impact on levels of obesity.
• According to the Mexican Soft Drinks Association the tax in Mexico has only reduced average calorie consumption by 6 calories per day -­‐ in a diet of over 3,000 calories.
• Professor Tom Sanders, emeritus professor of nutrition and dietetics at King’s College London, described it as: “a drop in the caloric ocean.” https://www.newscientist.com/article/dn28740-­‐‑mexicos-­‐‑sugary-­‐‑drink-­‐‑tax-­‐‑was-­‐‑a ll-­‐‑fizz-­‐‑for-­‐‑very-­‐‑little-­‐‑pop/
• McKinsey Global Institute’s 2014 study ‘Overcoming obesity’ considered 16 possible choices, including weight management programmes, parental education and media restrictions.
• The most impactful by far were portion size and reformulation of products. Taxes ranked just fourth from bottom in terms of impact.
• Public Health England put a sugar tax as its 5th most effective options – behind action on promotions, marketing and advertising, product definitions and a reformulation/reduced portion size sugar-­‐reduction programme.
• The British soft drinks sector has been active in introducing new products, reformulation and new product sizes. What has soft drinks done on sugar reduction?
• Significant reductions in sugars sourced from Soft Drinks over time. • This has resulted in a 13.6% fall in total sugar from soft drinks since 2012.
• In the same period volumes have increased by 2.5%.
• The rate of sugar reduction is improving – in 2015 sugars from soft drinks fell by 6.2%.
• Almost 60% of carbonated drinks sales are now diet or zero calorie – the highest proportion in Europe. • Also worth recognising – soft drinks make up only 2.2% of calories in the diet…
13.6 %
Our plans for the future
We recognise we have a role to play in the obesity challenge and whilst the proposed tax may limit some actions, we will not shirk in our ambition to help consumers.
The headline features of this:
A soft d rinks calorie reduction ambition of 20% per 100ml by 2020
The soft drinks sector set an ambition to reduce the calories per 100ml of soft drinks by 20% starting from a 2015 baseline.
This is a sector-­‐wide ambition and as such the 20% calorie reduction will be attained across the soft drinks market through a variety of calorie reduction activities -­‐ including new products, reformulation and changing portion sizes.
Voluntary Industry Commitment not to advertise HFSS soft d rinks to u nder 16s
The industry will voluntarily extend the current restrictions on HFSS soft drink broadcast advertising, using best efforts and available mechanisms, across all channels including digital, print and social media.
Alongside this we will take clear steps to limit advergames to over 16s, restrict the purchase of static advertising to an appropriate distance from schools, not sponsor specifically under 16 aimed events and children’s sports teams.