The Sugar Tax: What You Need To Know

The Sugar Tax: What You Need To Know
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Last week, the UK government confirmed legislation for a tax on sugar-sweetened drinks, which is set to begin from April 2018. While some are sceptical about the impact that a tax will have on our sugar consumption; others are hoping that it will persuade manufacturers to reduce the amount of sugar they pack into their products.

Obesity is a big problem in the UK, and it currently costs the NHS a huge £5.1 billion per year. The number one cause of this epidemic: sugar. Despite its dangers we can't seem to get enough, with teenagers and children consuming three times the recommended allowance. A recent report claims that 80,000 lives in a generation could be saved, just by tackling our sugar addiction and reducing our consumption of the sweet stuff. Obesity is not the only health concern from a sugar heavy diet, the effect it has on the health of our children's teeth is astounding. Tooth decay is now the number one reason for hospital admissions among young children, seeing a 10% rise in too extractions in the last four years alone. Sugar and soft drinks are seen as the cause of this rise and it is now more than ever that we need to ensure good oral health is part of everyday life for children growing up today in the UK

Having said that the sugar tax has attracted its fair share of opposition. While Jamie Oliver labelled it "a profound move" on Twitter when the bill was proposed, others think it's the wrong solution to the right problem. Critics have commented that the tax will only serve to push up costs for society's poorest.

"We already have a sugar tax. It's called VAT. Most foods and drinks in the UK are exempt from VAT, but sweets, chocolates, sports drinks, and soft drinks are standard-rated for VAT - so there's already effectively a 20 per cent sugar tax on sweets, chocolates and soft drinks. Yet despite it, obesity levels have not gone down." commented Alex Deane in an article for the Telegraph.

Despite the opposition, the confirmed introduction of the sugar tax in April 2018 gives companies a hopeful time frame to change their recipes in order to avoid the tax altogether. When it does come into effect, the sugar tax will have soft drinks firmly in its sights. Other high sugar snacks such as cake and chocolate will not be included. The reason for this: soft drinks, unlike cake, aren't necessarily seen as a treat and many people indulge every day.

There will be two levels of taxation. One for soft drinks with more than 5g of sugar per 100ml and another higher band for drinks with more than 8g of sugar per 100ml. Fizzy drinks that currently fall into the higher band include: Coca-Cola, 7Up, Red Bull, Dr Pepper and Ribena.

The Office for Budget Responsibility estimates the levy could add 18p to 24p to the price of a litre of fizzy drink if the full cost is passed on to the consumer. It's forecasted that this 1% rise in price will equate to a 0.8-1% reduction in demand. Milk-based drinks such as Frappuccinos, will surprisingly be exempt from the tax, despite containing large quantities of sugar. The government anticipate that the sugar tax will raise £520m across the UK. All of the money raised in England will be invested in sport in primary schools.

One thing is for sure; all eyes will be on the sugar tax when it's rolled out in 2018. Early signs are looking promising though, and Iron Bru has already reassured its investors that it will be making changes to ensure that two thirds of its products are either no-sugar or low-sugar by then.