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Sugar Tax 2018: What You Need To Know

posted in: Tips & Tricks | by: Olid Uddin

As the UK’s population becomes more aware of their health and the effect that diets have on our wellbeing, the government are listening and tighter regulations are beginning to roll in. In March 2016, the government announced that from April 2018, a tax on sugary soft drinks would be introduced. Chancellors applauded this movement as a step in the right direction towards tackling the rise in obesity and cases of type 2 diabetes across the nation, but how will this affect the drinks we already consume?

What is the ‘sugar tax’? 

By its official name, the sugar tax is known as the Soft Drinks Industry Levy and will impact soft drinks that contain more than 5g of sugar per 100ml. This covers the majority of beverages, including those found in commercial cold drinks dispensers, but not those including milk, medically-intended drinks or those containing only natural vegetable and fruit juice. Its main reason is to reduce the obesity epidemic that has wiped the country, deterring people from buying the drinks due to their new, higher price.

Where is the sugar tax money being spent?

One of the main winning factors of the sugar tax is the way in which it’s going to be spent. Former chancellor George Osborne estimated that the tax will raise around £520 million in its first year alone, a considerable amount in the eyes of any government. This money will then be injected back into the system in the form of funding for primary schools, specifically sports funding which will provide students with the opportunity to exercise more regularly.

Will it work?

The NHS have stated that, if action is not taken towards reducing the consumption of sugar in our diets, obesity rates in 2050 could reach 60% of men and 50% of women, with 25% of children becoming obese. In short, the tax may be a gamble in terms of how effective it’s going to be, but any efforts towards reducing the amount of sugar we have in our diets is going to be a step in the right direction. For manufacturers who are against the increase in pricing, this may result in recipes changing in order to reduce the sugar content, similarly to what Irn Bru have already done.

The NHS have also decided to take the new initiative further by actively working to improve the health of the nation by starting with their 1.3 million staff, of which 700,000 are estimated to be overweight or obese. To tackle this, sales of sugar-sweetened drinks will be reduced on work premises in 2017, with the outright ban of them being sold on NHS premises by 2019; what better way to make an impact than by those delivering our healthcare to lead by example.

How will this affect drinks manufacturers?

Drinks giant, Coca-Cola has already reformulated most of their fizzy drinks to ensure that the majority will avoid the levy, with the exception of the original Coca-Cola remaining the same and therefore incurring the tax. It’s likely that other brands will follow suit in order to avoid such costs whilst also working to maintain customer satisfaction in terms of taste and personal preferences. Despite these challenges, the sugar tax appear to be working with manufacturers rather than against them which, all being well, will result in a more amicable transition.

As the sugar tax rolls out across the UK, we will strive to keep our customers informed and aware of any pricing changes. In the meantime, if you’d like to find out more about how the 2018 sugar tax may affect you and your business, why not contact a member of the Connect Vending team today.

 

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