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The UK government is considering expanding the sugar tax on fizzy drinks to encompass milkshakes and similar beverages, according to recent proposals.
On Monday, consultations were announced regarding the removal of the exemption that currently exists for dairy products and plant-based alternatives like oat or rice drinks.
Chancellor Rachel Reeves previously indicated during last year’s budget that the government would evaluate the potential extension of the levy to these categories.
The Treasury reiterated its intent to proceed with changes, which include lowering the maximum sugar threshold for drinks subject to the levy from 5g to 4g per 100ml.
Since the introduction of the soft drinks industry levy (SDIL) in April 2018, initiated as part of a broader strategy to combat obesity, the industry has seen significant reformulations. The Treasury reported that 89% of fizzy beverages sold in the UK are currently exempt from the tax due to these adjustments.
According to government assessments, around 203 pre-packaged milk-based drinks, which constitute 93% of sales in that segment, would incur the tax unless modifications to reduce their sugar content are implemented.
Initially, the exemption for milk drinks was established due to concerns surrounding calcium intake, especially among children. However, the Treasury highlighted that young individuals receive only 3.5% of their calcium from these beverages, suggesting that the health benefits may not outweigh the risks posed by excessive sugar consumption.
In their statement, the Treasury emphasized, “By including milk-based and milk substitute drinks in the SDIL, the government seeks to create a financial incentive for manufacturers to enhance ongoing efforts to decrease sugar in their products.”
However, the Institute of Economic Affairs, a free-market think tank, voiced apprehension regarding the potential impact on consumers. Christopher Snowdon, head of lifestyle economics at the institute, criticized the expansion of the tax, stating, “The sugar tax has proven to be a dramatic failure and should be repealed rather than extended.”
Snowdon further remarked, “Countries worldwide have found that sugar taxes have little effectiveness. What happened to Starmer’s commitment not to increase taxes for working individuals?”
The consultation period regarding these proposed changes is set to continue until July 21.
Source
www.theguardian.com