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Treasury Introduces Draft Sugar Tax Bill

Treasury Introduces Draft Sugar Tax Bill

HM Treasury has published draft legislation introducing the sugar tax, nicknamed ‘the Coke Tax,’ which was first proposed by the government in the March Budget. Monday’s draft confirmed the introduction of a levy on soft drinks with sugar content above a certain level. The suggested figures are 24p a litre, for drinks with more than eight grams per 100 ml and 18p a litre for those with five to eight grams per 100 ml. It has also been confirmed that no levy shall be imposed on soft drinks with less than five grams per 100 ml. The government expects to raise £520 million in the first year after this tax, which is set to come into force in April 2018.

Many large soft drinks companies are trying to minimise their exposure. Coca-Cola, the biggest selling grocery brand in the UK, is the most exposed to the tax. A 330 ml can contains 35 grams of sugar, which equates to ten grams per 100 ml. According to Euromonitor, Coca-Cola’s portfolio, which includes Fanta and Sprite, could potentially pay 52 per cent of the £347 million expected of the largest five brands. Coca-Cola has no plans to change its classic recipe, however Coca-Cola European Partners (CCEP) claimed their “2020 goal of half their Coca-Cola sales being low or no-sugar, will be achieved by April 2018”. CCEP has invested more than £10 million in reformulating and promoting Coca-Cola Zero Sugar.

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