Bittersweet: The Sugar Tax

The UK government’s tax on soft drinks was introduced in a bid to improve the nation’s health. Based on studies into rising rates of obesity and type 2 diabetes, it came into effect in 2018, as a result of pressure from medical bodies.

The former chancellor, George Osborne, bowed down to pressure from doctors, scientists and campaigners in 2016, when he announced the sugar tax. Aimed at the soft drinks industry, it will hit them in the pocket if their beverages contain a high level of sugar. Any soft drink with a total sugar content of more than 5g per 100ml is taxed.

In 2016, when the tax was announced, Osborne estimated it would raise £520 million for the treasury. This was to be spent on helping primary school children to keep fit and stopping obesity by providing more sporting activities.




With a view supported by the pressure group Action on Sugar and celebrity chef Jamie Oliver (a long-time advocate of healthy eating), in July 2015, the British Medical Association urged the government to tax sugar.

The demands coincided with a study by the University of Cambridge, which linked 8,000 cases of type 2 diabetes to the consumption of sugary drinks each year. A further study in 2016 by the University of Oxford predicted that if the producers of the sweetest drinks cut sugar levels, then obesity, type 2 diabetes and tooth decay would be reduced. This would particularly aid the under-18s as the main consumers of sugary drinks.

The study’s co-author, Professor Susan Jebb, said the levy would have a “positive impact” on children’s health, although she admitted a sugar tax couldn’t solve the “obesity crisis” on its own, urging ministers to look at reducing other sources of sugar as well, most notably confectionery.

A sugar tax introduced in Mexico saw sugary soft drink sales decline by 6% in the first year. However, the then British prime minister, David Cameron, said he felt there were “more effective” ways of tackling obesity. The government finally agreed to the sugar tax after further pressure from campaigners.

A study by London’s Queen Mary University claimed reducing sugar by 40% in soft drinks over a five-year period could prevent 300,000 cases of type 2 diabetes.



Sugar tax launch

When Theresa May became prime minister in July 2016 she announced the sugar tax and it was agreed that it would come into effect in April 2018.

It was split into different categories: drinks with more than 5g of sugar per 100ml would be taxed at the lower level, while there was a higher tariff for the sweetest drinks containing 8g of sugar or more per 100ml. Shoppers would pay an extra 18p or 24p per litre for soft drinks, depending on how much sugar they contained, according to the Office for Budget Responsibility.

This would affect the most popular brands by adding an extra 6p on a regular can of Sprite or Fanta and 8p more on a can of Pepsi, Coca-Cola or Irn-Bru.

In the run-up to the introduction of the sugar tax, most soft drinks manufacturers began altering the way they brewed their beverages to reduce the sugar. They decided not to wait for shoppers to react to the price hike and instead supported the move. This meant the treasury wasn’t going to receive the estimated tax windfall that it announced in 2016, as retailers also supported the tax.

The projected revenue of £520 million had already dropped to an estimated £385 million by 2017. When the Budget documents were announced in November 2017, the estimated revenue had fallen again to £275 million per year, as more drinks manufacturers got on board.

However, the Treasury said the aim of the tax was to improve people’s health, so the fact that the tax windfall had reduced was irrelevant, since the legislation was achieving its goal.


Manufacturers’ response

Many top drinks brands have announced reductions in their sugar levels to comply with the legislation and avoid paying the sugar tax.

© balisnake / Adobe Stock

Britvic has reduced sugar across its range of drinks, which includes Fruit Shoot, Robinson’s and J20. The company says its aim is for 94% of its brand portfolio to fall below the sugar tax rate.

Japanese company Suntory, owner of Lucozade and Ribena, is also cutting sugar. Since the tax was announced in 2016, they say they have reduced their sugar content by 50%. Pepsi Co says its whole range of soft drinks will have reduced sugar by 2025.

AG Barr, manufacturer of the famous Scottish drink, Irn Bru, has stopped production of its original high-sugar version. Bosses say their aim is to have 99% of their soft drinks range fall below the sugar tax threshold.


Customers’ reaction

Some customers have said they don’t like the taste of the new, low sugar Irn Bru and have been stockpiling the original drinks. A consumer survey in 2018 showed opinions were divided over the healthier beverage, which has less than 50% of the sugar of its predecessor.

Sugar content per can has been cut from around 8.5 teaspoons to four, reducing the calories from just under 140 to around 65, but a petition was launched to preserve the traditional recipe, even though AG Barr said the new-style drink retained its “secret Irn-Bru flavour essence”.

A taste test organised in Glasgow by the Press Association showed opinions were divided. The new Irn Bru was described as “like drinking diet juice”, with some fans saying it had a totally different taste. Others felt the two versions tasted similar, describing the low-sugar one as having a “different kick” to it.

In general, the sugar tax hasn’t massively impacted on consumers’ buying habits. A survey by Nielsen revealed 62% of UK shoppers hadn’t changed their shopping habits at all since its introduction.

One-fifth of shoppers said it had made them more aware of products’ sugar content and they checked it more frequently, but the Sugar Tax Shopper Survey claimed 44% of respondents were still buying sugary beverages and only 1% said they had stopped drinking high-sugar drinks altogether.

Despite this, 54% of respondents said they were in favour of the tax and 69% believed it should be taken one step further and applied to confectionery and biscuits too.

As most soft drinks manufacturers are complying with the bid to reduce sugar, the tax hasn’t had as big an impact on shoppers’ spending as anticipated, analysts claim, with some experts saying it has had “little impact”.

However, the tax is considered to have been a success because shoppers are buying drinks containing less sugar whether they choose to or not, as many of the high sugar varieties are now unavailable.


More future taxes?

Excess sugar consumption is still a major problem in the UK, according to health chiefs. In fact, for four consecutive years, it has been the health sector’s number one concern. The sugar tax on drinks is viewed as the first step towards raising awareness and a positive step, in that it has spurred manufacturers into reducing sugar levels.

Now, the government’s attention is being turned towards a more far-reaching anti-obesity policy. Currently, ministers are discussing more advertising restrictions on sugary foods.

Some food manufacturers have signed up to a voluntary sugar reformulation plan, including a calorie reduction target.

New rules targeting junk food adverts aimed at children saw major brands such as Cadbury, Chewits and Squashies having online adverts for sweets banned in 2018. The Advertising Standards Authority accused the companies of not doing enough to stop under-16s seeing the content. Adverts had featured on the companies’ apps, websites, or social media feeds.

The ASA decision to ban them was welcomed by the Obesity Health Alliance, which said the ruling “should be celebrated”.  However, a study by Public Health England revealed primary school children still ate up to three sugary snacks per day.

A study by the World Health Organisation claimed 25% of children aged two to 15 were classified as overweight or obese, describing it as a “serious and growing problem”, due to the subsequent health issues it carries forward into adulthood.

What do you think of the sugar tax? Do you think it’s improving children’s health? Are low-sugar soft drinks as tasty as the old high-sugar variety? Do you believe new taxes should be levied at confectionery and biscuits to discourage people from buying them or should it be up to parents what they feed their children?

Let other people know your opinions in Psydro’s food and drink consumer reviews section. Whether you’re in favour of the government enforcing healthy eating on shoppers, or whether you feel we’re living in a “nanny state”, we’d love to hear from you!

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