Not happy over the new sugar tax? Well, soft drink companies aren’t, either.
Coca-Cola and other drink makers are preparing to sue the Government over the new tax, which will add a speculated 24p a litre to products with high sugar content. Meaning Irn-Bru, Coke and Red Bull will be more expensive.
The new tax was announced in last week’s Budget and is set to raise £520 million, which will be invested in primary school sport.
But the proposal has put the man who suggested it, Chancellor George Osborn, on a collision course with some of the world’s most powerful companies. And The Sunday Times reports that a legal challenge is being put forth, claiming the tax is discriminatory because it won’t affect other drinks with a high sugar content like milkshakes and fruit juices.
A senior industry source told Business Matters: “It’s fair to say we are more than just considering legal action. This has been rushed through without warning.’
And it’s looking good for the soft drink giants – similar challenges have been successful in Finland and Denmark in the past.
Jon Woods, the general manager of Coca-Cola Great Britain, said after the budget announcement that the company was continuing to work on reducing sugar levels consumed in drinks, Metro reports.
We have already done a great deal and our actions are doing more to reduce sugar and calorie intake than a tax will. It’s disappointing that the Government has chosen to single out soft drinks in its attempt to tackle the problem.
If the aim is to reduce obesity, this levy flies in the face of evidence from around the world which shows taxes do very little, if anything, to reduce sugar and calorie intake or obesity levels but do add to people’s cost of living.
If you’re partial to the occasional can of Coke, let’s hope this challenge is as successful as the ones abroad. Otherwise, our favourite soft drinks are going to get more expensive from 2018 – stock up while you can.