Fizzy drinks increase by 8p a can as sugar tax bites

Friday, 6th April 2018, 09:15 am
Updated Friday, 6th April 2018, 13:51 pm

Cans of fizzy pop now cost as much as 8 pence more, with the new sugar tax coming into force on April 6

The Soft Drinks Industry Levy (SDIL), also known as ‘the sugar tax’, makes soft drinks companies pay a charge for drinks with added sugar following its announcement in the 2016 Budget in a bid to tackle rising obesity rates. This followed a campaign by celebrity chef Jamie Oliver for a levy to help combat child obesity.

We did it guys !!we did it !!! A sugar levy on sugary sweetened drinks ...... A profound move… https://t.co/0XkydLzLCo

— Jamie Oliver (@jamieoliver) March 16, 2016

The new tax makes soft drinks companies pay a charge for drinks with added sugar, with two bands determining the tax increase.

The amount of tax depends on the total sugar content of the drink with companies having to pay 18p per litre on tax if the drink has 5g of sugar or more per 100ml, or 24p per litre if the drink has 8g of sugar or more per 100ml.

The Government has said this is not a tax on consumers, meaning companies do not have to pass the charge on to customers; however, prices of sugary soft drinks are expected to rise.

Under the new tax system a 330ml can of Coca Cola, Old Jamaican Ginger Beer, Pepsi and Dr Pepper will cost 8p more; and a 330ml can of Sprite, Fanta and Schweppes Indian Tonic Water could cost 6p more.

A litre bottle of pop could cost as much as 24p extra.

The new sugar tax is a welcome step for health campaigners.

But not all popular sugary drinks are set to be hit with the extra tax.

Schweppes Lemonade, Lilt and Tango are all exempt from the tax increase due to their smaller sugar content levels.

Sometimes you just can’t beat a Classic. pic.twitter.com/UXv6qex5Gf

— Coca-Cola GB (@CocaCola_GB) April 6, 2018

Coco-Cola is tackling the new regulations head-on, launching a campaign which features Elvis Presley, including the strapline “They don’t make ‘em like they used to. We do”. It will focuses on the brand's heritage of the brand and how the recipe hasn’t changed since its invention 132 years ago (well, if you ignore the short-lived ‘new Coke’ in 1985).

Coca-Cola Classic has not been reformulated ahead of the SugarTax, despite this meaning a1.75 litre bottle of Classic will shrink to 1.5 litres, while still costing £1.99. The price of a 500ml bottle will increase, from £1.09 to £1.25.

Irn Bru's parent company A.G Barr famously changed its recipe at the start of the year to get around the sugar tax by using controversial sweetener aspartame to reduce the sugar content from 10.3g per 100ml to just 4.7.

Let's not forget that @irnbru ruined their famous drink back in January with 50% of the sugar taken out.Industry analysts have already downgraded Irn Bru's prospects this year too, saying they fully expect their sales to drop because of the recipe change. https://t.co/yXxfX14GlW

— Against Sugar Tax (@AgainstSugarTax) April 1, 2018

The post-tax fortunes of Scotland's 'other national drink' compared to Coke may act as a test case for other companies unsure how to handle the new tax: more than 50,000 have signed a petition asking that Irn Bru's new recipe be ditched, while A.G Barr has reported a sales rise for the previous year, amid reports of consumers stockpiling the 'classic'version.

Drinks with a high milk content are also exempt from the tax as they contain calcium and other nutrients, as well as fruit juices because they do not contain added sugar.