Recipe changes by soft drink makers mean government’s sugar tax won’t raise half as much as first thought
- Credit: PA
Health campaigners have hailed the extent of reformulations among soft drinks brands to escape the 'sugar tax', which comes into effect on Friday.
Manufacturers of soft drinks containing more than 5g of sugar per 100ml will pay a levy of 18p a litre to the Treasury, or 24p a litre if the sugar content is more than 8g per 100ml, with the cost passed on to retailers and customers.
The government and campaigners hope it could aid a significant decline in obesity by putting consumers off buying the most sugary drinks.
Original Pepsi and Coca-Cola Classic are two examples of formulations that are remaining intact due to customer demand, and will therefore attract the levy, with the cost of a 330ml can of the original Coca-Cola, containing around seven teaspoons of sugar, likely to rise by around 8p plus VAT.
But more than 50% of manufacturers have changed their formulas to cut sugar, according to figures last month from the Treasury.
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As a result, the Office for Budget Responsibility (OBR) estimates the levy will raise £240m in 2018-19 – less than half the £520m it was expected to raise when the government first announced the move at the 2016 budget.
Tesco has reformulated all of its own-label soft drinks to come in below the threshold for the levy, claiming the changes have cut more than nine billion calories from customers' diets every year, as have Morrisons, Asda and The Co-op.
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A Co-op spokeswoman said: 'The levy is designed to be passed onto customers and drive a change in consumer behaviour so, for branded soft drinks that do qualify, we will pass on the cost of the levy and the VAT.'
Britvic said 94% of its drinks, including Robinson's Refresh'd, Purdey's and Tango, are below or exempt from the levy, with this figure dropping to 72% of Britvic's total portfolio including PepsiCo and the original Pepsi.
A Coca-Cola Great Britain spokeswoman said, while Coca-Cola Classic will be subject to the new tax, Diet Coke and Coca-Cola Zero Sugar will not.
Irn-Bru has reformulated its famously sugary recipe to avoid the tax, cutting the sugar in a can from 8.5 teaspoons to four, despite a consumer backlash and reports that fans were stockpiling cans and bottles of the original.
A spokesman for the drink's maker A.G. Barr said: 'Irn-Bru continues to be made using the same secret Irn-Bru flavour essence, but with less sugar. The vast majority of our drinkers want to consume less sugar so that's what we're now offering.
'We ran lots of taste tests that showed most people can't tell the difference.'
However the British Soft Drinks Association said there was no evidence to suggest that a tax of this sort would have a meaningful impact on obesity.
It said sugar intake from soft drinks had been declining year-on-year since 2013 and yet NHS figures showed that obesity prevalence increased from 15% in 1993 to 27% in 2015.