Budgeting for the sugar levy

As I write, the UK is preparing for the Spring Budget speech 2017, set to be delivered by chancellor Philip Hammond at 12:30pm today (8 March). It was this time last year that then chancellor George Osborne announced his intention to levy a sugar tax on the soft drinks industry and it is expected those rates will be announced today.

While the food and drink industry has been taking steps to reformulate its products in recent years in light of changing consumer lifestyles and preferences, last year’s announcement has been the catalyst for a number of reformulation programmes.

In the last few weeks alone, Coca-Cola European Partners announced plans to launch a vanilla variant of its Coca-Cola Zero Sugar range, in addition to plans to reformulate Coke Zero Cherry to Coca-Cola Zero Sugar. Fellow soft drinks manufacturer AG Barr announced a sugar reduction programme across its portfolio, which, by autumn, will see more than 90 per cent of its offering containing less than 5g of total sugar per 100ml. Lucozade Zero, meanwhile, was the most successful soft drink launch in 2016 and last month it extended the portfolio with the unveiling of Lucozade Zero Original flavour, joining Orange and Pink Lemonade in the Zero range.

Some believe the sugar tax on drinks could be the forerunner of further food taxes, and whether this comes to fruition or not, other categories are indeed following suit with reformulation programmes. Nestlé UK and Ireland, for example, has just announced that it is stripping out 10 per cent of sugar from its confectionery portfolio by 2018, while Honey Monster Puffs is set to relaunch with a 25 per cent reduced sugar content – half of the original recipe.

Now, time for the Budget. We will of course keep you updated with any further details on the soft drinks tax, as well as anything else of interest to the food and drink industry.

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