Revealed, ‘threat’ by Coca-Cola to cut investment over sugar tax
COCA-COLA threatened to cut investment in Britain if Philip Hammond pressed ahead with plans for a sugar tax, The Sunday Telegraph can disclose.
Documents seen by this newspaper show that during the Chancellor’s first week in office, the soft drinks giant warned privately that amid the “uncertainty” caused by the Brexit vote, the levy risked “our ability to maintain our investment in our UK operations”.
The Food and Drink Federation issued a separate warning to the Prime Minister that business “confidence” was “fragile”. Mr Hammond and Theresa May pressed on with the tax, declaring that it would help tackle Britain’s obesity crisis. But the Prime Minister dropped a separate pledge from the Government’s obesity strategy after the industry warned her off any move that would further shake their “confidence”, documents reveal.
Last night campaigners said Coca-Cola had showed “reprehensible behaviour in threatening to stop investing in the UK” in an attempt to kill the proposals. They also criticised the Government for appearing to have separately bowed to industry pressure to scrap a pre-watershed ban on the advertising of sugary foods.
Days after Mrs May entered Downing Street in July last year, James Quincey, the worldwide president of Coca-Cola, wrote: “The single biggest risk to our ability to maintain our investment in our UK operations is the soft drinks levy ... It will not reduce obesity and have negative consequences for both businesses and consumers ... The soft drinks tax will make it more difficult to con- tinue investing in the changes we are making to our business.”
Mr Quincey set out how the company employed 4,000 people in the UK and generated “about £2.4billion to the wider economy” every year.
Katharine Jenner, campaign director of Action on Sugar said: “It is now clear that manufacturers and advertisers used a highly sensitive political issue as leverage in order to pressure the Prime Minister into scrapping measures that would be a crucial part of the fight against childhood obesity.”
A government source said the decision to scrap the advertising ban, which had been included in a draft of the obesity strategy, was because the policy was seen as too “interventionist”.
A spokesman for Coca-Cola said: “We have made our view of the Government’s soft drinks tax known in public and in private for many months ... no one should be surprised that we monitor and respond to regulatory issues that impact our business.”
A Food and Drink Federation spokesman said the body did “not believe the soft drinks industry levy will make any lasting or significant difference to the obesity challenge”, while the UK already has “one of the strictest advertising regulatory regimes in the world concerning the foods that can be advertised to children on TV”.