Source: Reuters, 17 March 2016
Britain will introduce a sugar levy on soft drinks in two years'
time to tackle a growing obesity crisis, Chancellor George Osborne
said in a surprise announcement on Wednesday, delighting health
campaigners and angering drink makers.
Just months after the government ruled out a sugar tax, Osborne
said the levy, which would be imposed on companies and based on the
sugar content in drinks, would raise about 500 million pounds
"I am not prepared to look back at my time here in this
parliament, doing this job and say to my children's generation: I'm
sorry, we knew there was a problem with sugary drinks," Osborne
"We knew it caused disease. But we ducked the difficult
decisions and we did nothing," he said.
Britain joins France, Belgium, Hungary and Mexico which
have imposed some form of tax on drinks with added sugar, while
Scandinavian countries have levied similar taxes, with varying
degrees of success, for many years.
Shares in drinks' groups fell on the news, with Britvic and AG
Barr, which makes Irn Bru, down between 3 percent and 5 percent.
Sweetener group Tate & Lyle was down 2 percent. Coca-Cola Co
fell 1.3 percent in New York.
Britain's Food and Drink Federation said Osborne's tax was "a
piece of political theatre" that would make no difference to
obesity and cost jobs.
Osborne said obesity fuelled rates of heart disease, diabetes
and other illnesses which cost the economy 27 billion pounds a year
and were a huge burden on the state-funded National Health Service
"Five-year-old children are consuming their body weight in sugar
every year," he said. "Experts predict that within a generation
over half of all boys, and 70 percent of girls could be overweight
The tax would apply to drinks with a total sugar content above 5
grams per 100 ml, with a higher band for even more sugary drinks.
Osborne said a can of cola typically had nine teaspoons of sugar,
with some containing 13.
The Office for Budget Responsibility, the government's budget
watchdog, said the figures implied a levy of 18 pence per litre, or
24 pence for those in the higher band. A two litre bottle of Pepsi
currently retails for about 2 pounds.
Osborne acknowledged the price rise might be passed on to
consumers but said the money raised would be spent on funding
Last November, a call by British lawmakers for a sugar tax was
rejected by the government, leading to accusations it was giving in
to lobbying by food giants.
Supporters say it will raise the cost of high-calorie products
and reduce consumption, in the same way that tobacco taxes have
helped reduce smoking.
A scientific study published in January found a 40 percent
reduction in free sugars added to drinks over five years could
result in some 500,0000 fewer adults being overweight and a million
fewer being obese.
That in turn would prevent between 274,000 and 309,000
obesity-related type 2 diabetes cases over the next two
The study's author, Graham MacGregor, a professor of
cardiovascular medicine and chairman of the Action on Sugar
campaign group, said that to be effective, the levy had to be at
least 20 percent on all sugar-sweetened soft drinks and escalate if
companies did not comply to reformulation targets.
News of tax was welcomed by health campaigners.
"We did it guys!! We did it !!! A profound move that will ripple
around the world," tweeted celebrity chef Jamie Oliver, who has led
a high-profile campaign for action.
"This will help us shed pounds off our waistlines, and save
pounds on future NHS costs," said Simon Stevens, NHS England chief
executive, saying soft drinks were children's largest single source
of excess sugar.
Gavin Partington, Director General of the British Soft Drinks
Association, said the sector had cutting sugar levels.
"By contrast sugar and calorie intake from all other major take
home food categories is increasing - which makes the targeting of
soft drinks simply absurd," Partington said.