Sugar tax: What is it and how will it work?

Sugar tax: What is it and how will it work?
Photo by Jeff Blackler/REX/Shutterstock

A new sugar levy on the soft drinks industry is set to be introduced by the U.K. government in an effort to combat obesity.

In his Budget on Wednesday (16Mar16), Chancellor George Osborne announced that a tax will be levied on drinks companies in two years’ time, giving them time to change the ingredients and recipes of their products.

In response to the announcement, celebrity chef Jamie Oliver praised the tax, writing on Instagram that it is “profound move that will ripple around the world”. But what exactly is the sugar tax and what does it mean for consumers?

Which products will be taxed?

Manufacturers will be taxed according to the quantity of the sugar-sweetened drinks they produce or import.

There will be two categories of taxation – one for sugar content above five grams per 100ml and a higher band for drinks with more than eight grams per 100ml.

This means a standard can of Coca-Cola costing around 70 pence ($1) will have an 8 pence tax placed on it when the scheme is introduced in 2018.

Pure fruit juices and milk-based drinks will not be included but other drinks such as Red Bull, Strawberry Ribena, Lucozade Energy and some tonic waters will be impacted, with the lower tax band catching drinks like Dr Pepper, Fanta and Sprite. The estimated £520 million ($750 million) in taxes raised will be put towards boosting sports in schools.

Will the tax actually work?

Britain will be joining a growing list of countries with levies on junk foods. Norway taxes chocolate and sweets, Finland and France tax sweetened drinks and Mexico introduced a 10 per cent tax on sugary drinks in 2014.

A paper published in January (16), found that sales of fizzy drinks in Mexico, a nation with some of the worst obesity stats, had fallen by 12 per cent in the first year.

The effects of sugar

Eating a diet high in sugar can lead to weight gain and obesity, which can consequent in health conditions such as heart disease. A report published by the NHS last year also noted that drinking lots of sugary drinks had been linked to an increased risk of Type 2 diabetes.

What are some alternatives?

So for those who don’t get excited about plain old water, what is there left to drink? Stay hydrated by sprucing up your water with a couple of slices of lemon, orange, cucumber and some mint for instant flavour. Or swap out fizzy drink for a cup of green tea, which is calorie-free and proven to be naturally high in antioxidants. Add a couple of drops of honey if you need a little extra sweetening.

Other great alternatives to soft drinks are low-sodium vegetable juices, unsweetened coconut water which is rich in electrolytes and the fermented tea drink Kombucha, which also contains sugar but considerably less than soft drinks.

© Cover Media

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