According to a new government proposal on Monday, the sugar tax currently applicable to carbonated beverages may soon expand to smoothies and similar products.
The Treasury launched a consultation to eliminate exemptions for dairy-based beverages and their non-dairy alternatives such as oats and rice, and placed them within their scope under the Soft Beverage Industry Tax (SDIL). The government is also considering tightening the sugar threshold that triggers taxation, thereby reducing it to 4G from every 100 milliliters.
Prime Minister Rachel Reeves said for the first time last year that the government would consider expanding the scope of taxation. The Treasury has now confirmed its intention to make changes, citing health concerns about the high sugar content of many milk-based beverages.
According to government analysis, there are currently about 203 pre-packaged milk-based beverages on the market, and 93% of sales in this category may be affected unless manufacturers lower sugar levels.
The Conservative government launched SDIL in 2018, part of a broader driving force for anti-obesity. Milk-based beverages were initially due to concerns about the importance of calcium intake, especially for children. However, the Ministry of Finance now says the drink contributes only 3.5% of young people’s calcium intake, suggesting that the potential health benefits of its consumption are outweighed by the risk of excessive sugar.
“By bringing milk-based beverages and milk alternative beverages to SDIL, the government will introduce tax incentives so that manufacturers can make progress and further reduce sugar in recipes,” a spokesperson for the Ministry of Finance said.
After the introduction of SDIL, 89% of the carbonated beverages sold in the UK were re-established to avoid taxes, which greatly reduced the sugar content.
However, the proposal raises criticism in some ways. “The sugar tax has been a huge failure and should be abolished, not expanded,” said Christopher Snowdon, head of lifestyle economics at the Institute for Economic Affairs, a free market think tank.
The government's consultations on the proposed changes, which will last until July 21, invite industry stakeholders, public health groups and a broader public view.
