By: David Racadio
To the surprise of many food and drink manufacturers, the Chancellor announced in the last Budget that a levy on sugary drinks will be introduced in 2018. Most had thought that a sugar tax might be ‘held over the head of the food and drink industry’ while the Government ratcheted up the pressure on companies to reformulate products to include less sugar. However, the surprise move is likely to cost the likes of Britvic, Coca Cola and PepsiCo millions of pounds unless they decide to pass on the levy to consumers.
Many food companies see the sugar levy as only the first move in a change of approach to sugar from the Government. Some fear that levies and taxes on products with sugar will rise and be extended to other food categories.
Are they right to be worried?
So, what food categories are in the firing line?
Food manufacturers, particularly those focused on pre-prepared meals, milk-based drinks, cakes & biscuits and chocolate, have been relatively quiet over the last few months. Perhaps they are waiting to see the details of the Government’s twice delayed Childhood Obesity Strategy and how the sugar levy will bed in. However, they should not presume that politicians will spend much time reviewing the effectiveness of the current levy on sugary drinks. Many MPs, particularly on the Labour and SNP sides, are ready to extend the levy to other food categories now.
The battle has arrived. It is time for Big Food to take more responsibility for the rising tide of obesity and demonstrate how it is helping people to control their weight with bold innovation and adventurous reformulation. While the industry is right to point out the limitations of the sugar levy and the negative impacts that stricter regulation has on consumers, without a new vision that challenges the loud and aggressive health lobby, legislators are likely to increase and extend the sugar levy.