F&D industry responds to Budget

Industry has been having its say on chancellor Philip Hammond’s Spring Budget statement.

Hammond confirmed the introduction of a soft drinks tax from April 2018 and advised that drinks with more than 5g of sugar per 100ml will be subject to a tax of 18p, rising to 24p per litre for those with 8g plus. The money raised will go to the Department for Education, which is expected to receive an extra £1 billion. However, Hammond noted that due to reformulation programmes already underway, revenues could be lower than anticipated.

Dr Alison Tedstone, chief nutritionist at Public Health England, says, “The sugar levy is already having an effect, with some manufacturers announcing cuts to sugar in their drinks. We’re working with the food industry to do the same across a range of other products too and some household brands have made similar announcements.

“There is a lot to do yet, but overall we’re optimistic about cutting the nation’s sugar consumption and seeing health benefits as a result.”

Debbie Wood, director of professional development for the Chartered Institute of Environmental Health, adds, “Less tax being generated from the sugar tax on soft drinks is positive news. Producers have clearly got the message that they need to change their practices and initiatives are spreading as only today, Nestle announced their chocolate bars will soon contain less sugar.

“There is still much work to do on this front and success will only be achieved if the Government and industry work together to adopt more effective mechanisms to support healthier food offers.”

Ian Wright, director general, Food and Drink Federation, comments, “We continue to oppose the soft drinks industry levy because of its undue focus on sugar (as opposed to calories) and because there is no evidence that it will reduce obesity. Consequently, while we’re pleased to see the chancellor acknowledge the efforts made by soft drinks manufacturers to reduce sugar levels in their products, we continue to believe that implementation of the levy should be paused while such good progress is being made voluntarily.”

Discussing other announcements delivered in the Budget, Wright continues, “We are pleased to see productivity and innovation at the heart of today’s Budget.

“We welcome the chancellor’s commitment to improve productivity, boost R&D and help bridge the skills gap. Access to a skilled workforce is particularly pressing for food and drink manufacturing as we require an additional 130,000 new recruits by 2024. It is important that food and drink manufacturing as a sector is fully recognised in the new technical qualifications and we look forward to being closely involved in their implementation.

“It was also pleasing to see details of how the £4.7 billion from the National Productivity Investment Fund announced at Autumn statement will be invested in science and innovation. A number of global food and drink companies have already chosen to base their R&D centres here and we want the UK to be the number one location of choice for others too.

“The revision of the R&D tax credits system was something we had asked government for and we support. Increasing simplicity around the process for claiming R&D tax credits will benefit companies of all sizes – and SMEs particularly.”