Less sugar? No, the sweet-toothed will only swap drinks for chocolate
A NEW tax on sugary drinks could actually increase the amount of sugar people consume as they switch to chocolate bars instead, the Institute for Fiscal Studies has warned.
The Chancellor announced a £520 million levy on drinks with high levels of sugar in his Budget, which will come into force in 2017.
However the IFS highlighted the fact that just 17 per cent of added sugar in people’s diets comes from soft drinks, and said the measure will do nothing to tackle foods that are high in sugar.
It suggested that children may just “move away from soft drinks to other sugar products” such as chocolate to get the same “sugar hit”.
The Institute for Fiscal Studies also pointed out that the most sugary drinks would effectively be taxed at lower rates under the policy.
It said that because the levy of 24p a litre will apply to all drinks with more than 8 grams of sugar per 100ml, those with the highest levels of sugar will be taxed at the same rate as those just above the threshold. The IFS also warned that the new levy could lead to a black market in sugary drinks as they are smuggled across borders to cut household bills.
Coca-Cola, one of the biggest drinks manufacturers in the world, said there was “no evidence” that sugar taxes worked. The Daily Telegraph understands that the drinks industry is considering a legal challenge against the policy. Dominic Watkins, head of food law at DWF, said that the measure could be in breach of European Union rules on competitiveness.
Mr Osborne’s plans have drawn criticism from his own MPs amid concerns that the tax on sugary drinks will push consumers towards cheaper ownbrand products and chocolate bars.
A poll of Conservative MPs taken before the Budget suggested that four in five Tory MPs are opposed to the plans. Will Quince, a Tory MP and former Britvic employee, has written to the Chancellor to complain about the policy after he branded it “bizarre” that parents can still buy yoghurts, chocolate bars and sugary-rich cereals without being hit by the levy.
He claimed those likening the tax to high duties on tobacco have missed the point, adding: “With cigarettes if you want to smoke you have to pay the tax, it’s not the same with sugary drinks.
“We’re not saying you can’t have sugar, we’re saying you can’t have this drink, but it’s OK you can go and have a Mars bar instead.”
There are also concerns that the money raised by the tax will not be spent solely on sport for primary school children but instead around £280 million of the £520 million total will be spent on keeping secondary schools open for longer.
Tim Rycroft, corporate affairs director at the Food and Drink Federation, said the industry was concerned that other, broader measures could follow the sugar tax and affect food manufacturers.
He said: “Everyone assumes this is about the big brands like Coke and Pepsi but there’s a whole industry out there supplying own-label drinks to supermarkets. They operate on small margins and they’ll have to find this money from somewhere.”