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Drinks makers' anger over proposed sugar levy flares

Major soft-drinks groups have reiterated their criticism of the proposed sugar tax as the initial consultation period on the legislation nears an end
September 29, 2016

Drinks manufacturers have launched renewed criticism of the proposed sugar tax as the government's consultation period with the industry comes to an end.

Former chancellor George Osborne announced the levy in his Budget earlier this year and the proposed consultation was kick-started in spite of the subsequent EU referendum vote. A government spokesman said it would end in mid-October as planned with a view to proposing legislation in 2017.

But major drinks companies have questioned the rationale behind the move, especially as they were already formulating their recipes to include low- and no-sugar versions in response to consumer demand.

Roger White, chief executive of AG Barr (BAG), said his company would be entering a submission.

"We don't feel imposing a tax on one category, which is only 3 per cent of UK sugar consumption, and is rapidly changing, will make a material difference to the UK consumer diet," he said.

The company called the proposed tax "punitive and unnecessary" in its results this week, adding that it would be "very complex, expensive and difficult to implement".

Britvic (BVIC) has already reformulated key brands and removed added sugar from Fruit Shoot and Robinsons. A spokesperson said a "holistic" approach to tackling obesity was needed and the company was "disappointed at the government’s decision to impose a soft drinks tax", but said it would "work constructively" with ministers.

Nichols (NICL) has answered a questionnaire from HM Revenue & Customs due for submission on 13 October. It too has continued reformulating its recipes and roughly 40 per cent of its UK packaged sales are outside the proposed levy.