As milk drinks such as milkshakes, which had been exempted so far, became a new target of taxation and the tax threshold was lowered, Pepsi and Fanta were put under pressure to raise prices.
According to a Daily Mail report on the 25th, the British Labor Party government announced that it would expand the soft drink levy system, called the ‘sugar tax’, prior to the announcement of the budget.
This measure will include milkshakes and chocolate and strawberry milk in bottles or packs. However, beverages made directly at cafes or restaurants are excluded.
“The government will not turn a blind eye to a situation where children’s health is getting worse,” Health Secretary Wes Streeting told the House of Representatives.
The exemption clause on milk drinks is replaced by a ‘lactose allowance’, so the sugar naturally contained in the milk component is considered, but additional sugar is taxed.
In addition, among milk alternative drinks such as oat milk, products containing “additional sugar” in addition to sugar from the main ingredient are also excluded from the exemption.
The sugar content standard will also be stricter. Currently, at least 18 pence per liter is levied on beverages containing “5 g per 100 mL” or more of sugar, which will be lowered to 4.5 g per 100 mL.
The government initially considered lowering the cost to 4 grams, but took a step back when the industry protested, saying, “It is impossible to re-adjust, so we have no choice but to pass on the cost to consumers.”
The changes will be implemented from January 2028 after further consultation. It is nine months behind the original plan.
The move affects 11% of all soft drink sales. The government expected to raise prices by only 35% of them. Pepsi and Fanta faced price hikes, the Daily Mail reported.
The sugar tax, which was previously introduced in April 2018, was intended to encourage producers to reduce the sugar content or capacity of their products.
The UK government said the implementation of the system reduced the average sugar content of taxable soft drinks by 46% from 2015 to 2020.
Health Minister Karin Smith stressed that “obesity is the biggest challenge facing the current generation of health services.”
JULIE KIM
US ASIA JOURNAL
