Soft drinks prices set to spike

The price of sugary soft drinks is set to increase from 6 April as the government’s soft drinks levy comes into effect.

The new levy requires manufacturers to pay 18p per litre to the government for products with a total sugar content of five grams or more per 100 millilitres, and 24p per litre for those with eight grams or more per 100 millilitres.

Under the levy, the cost of producing a standard can of Coca Cola will increase by 8p, while a pint of a soft drink subject to the higher band served in a pub or restaurant will increase by 14p. Some or all of the cost increases are likely to be passed on to consumers.

The government believes the levy will cut obesity rates and generate in excess of £240m in revenue for the exchequer in the new tax year.

Manufacturers have been working hard to reformulate soft drinks to bring them below the levy’s thresholds. Britvic says that 94% of its drinks, including Robinson’s and Tango, are now exempt, while AG Barr has halved the sugar content in Irn Bru despite a petition from fans of the brand to maintain the current recipe. Coca Cola has opted not to reformulate Classic Coke and instead point customers looking to reduce their sugar consumption towards Diet Coke and Coke Zero.

In its recently published soft drinks review, Britvic said the result of industry reformulation means the predicted exposure of businesses to the levy has fallen by over £200m. Whereas 25% of soft drinks volume would have been liable to the sugar levy in 2016, just 12% is expected to be liable when the levy kicks in.

To coincide with the introduction of the soft drinks levy, Public Health England is launching a new Change4Life campaign to encourage parents to swap children’s sugary drinks for healthier alternatives such as water and lower fat milks after data showed a child in England has a tooth removed in hospital every ten minutes due to preventable tooth decay.

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