Sugar Tax launched: How George Osborne lost his sweet tooth

Posted on 16/03/2016 · Posted in Palm PR

In today’s budget George Osborne announced the introduction of a so-called Sugar Tax. The levy will be paid for by the makers of soft drinks rather than consumers (although costs could be passed on).

Pure fruit juices and milk-based drinks will be excluded, as well as small producers. Although tonic water and coconut water will fall under the new policy.

The tax will come into effect in two years’ time to give companies time to adjust their recipes. The Chancellor cited childhood obesity concerns as the reason behind the move with the expected £520m raised to be spent on doubling the funding of sports in primary schools.

The duty will be staggered, with a rate for drinks with a total sugar content above 5g per 100ml and a higher cost for drinks with more than 8g per 100ml.

Current plans suggest that a 330ml (12-ounce) can of Coke will attract an 8p tax, whereas the lower-sugar Coca-Cola Life will be taxed 6p, says The Economist.

As this policy has only just been announced, several questions remain unanswered, specifically whether the tax will differentiate between added sugars and the sugars found naturally in foods, like fructose in fruit.

There will also certainly be industry-wide concerns that this new duty will be a gateway tax to sugar in general.

The Office for Budget Responsibility has predicted that producers will change  ingredients to avoid the tax, and that shoppers will consume around 5% less drink in the high-sugar category per year (but 2% more in the lower category).

Mr Osborne said in Parliament: “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. We knew it caused disease. But we ducked the difficult decisions and we did nothing’.”

Jamie Oliver praised the decision on Twitter, labelling it ‘profound’.

The TV Chef tweeted: “We did it guys !! We did it !!! A sugar levy on sugary sweetened drinks …… A profound move…”