Re­vealed, ‘threat’ by Coca-Cola to cut in­vest­ment over sugar tax

The Sunday Telegraph - - News - By Ed­ward Mal­nick WHITE­HALL EDITOR

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”.

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