The surprise budget measure is set to launch in April 2018, and will put up the price of drinks which contain at least 5g of sugar per 100ml – such as Red Bull, Capri Sun, Sprite and several versions of cola. Drinks with 8g of sugar per 100ml or more will face a higher rate of tax.
Coca-Cola’s UK boss, Leendert den Hollander, said: “We don’t believe the sugar tax is the right thing to be done. We are not debating the issue, we are debating the solution. The facts don’t suggest that a sugar tax works to change behaviour.
“We know this is one of the mechanics and solutions that people think will help deal with the issue of obesity, at least from a government perspective but there is no evidence to suggest that this will reduce obesity.”
The Treasury has not decided how much more producers will have to charge for heavily sweetened drinks but health campaigners want it to be 20%.
The announcement of the tax hit shares in soft drinks companies, including AG Barr, the maker of Irn Bru; Nichols, the maker of Vimto; and Britvic, which makes and distributes Pepsi in the UK.
Den Hollander, speaking at the Retail Week life conference in London, declined to comment on whether Coca-Cola’s sales were likely to be affected.
But he said the company’s entire innovations budget last year had been invested in low- or no-calorie drinks, although half the company’s sales come from it’s traditional full sugar product.
“We are taking action and there is more we can do but we are looking for more proven fact based solution than the sugar tax,” he said.
Citing the example of a similar tax in Mexico, he added: “If the objective is to reduce calorie intake on a daily basis then the example in Mexico show it doesn’t work.” Den Hollander said Mexico’s tax on sugar drinks, introduced in 2014, had only reduced average intake by six calories a day.
But sales in Mexico have fallen 12% since it imposed a 10% surcharge on soft drinks in 2014. Similar schemes have also been introduced in France, Finland and Hungary.
Den Hollander’s comments were echoed byRoger White, chief executive of AG Barr and Britvic. He said: “It is extremely disappointing that soft drinks have been singled out given it is the only food and drink category to have made any real progress in reducing sugar intake in recent years, down 13.6 per cent since 2012.”
This article was written by Sarah Butler, for theguardian.com on Thursday 17th March 2016 12.53 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010
Have something to tell us about this article?