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Expect change, thereís a new sugar tax


April 10, 2018

The new sugar tax which was implemented 6th April depicts the government commitment to fighting obesity and type-2 diabetes. The new sugar law is expected to raise not less than £520 million annually which is to be channelled towards sports in schools and breakfast clubs.

Manufacturers will be taxed according to the quantity of sugar in their drinks produced or imported. For businesses such as restaurants, retailers and hotels, the new price hike on sugary drinks to correspond to the tax will likely lead to a decrease in consumer sales. However, this new tax may also kickstart the launch of a new drinks trend, towards reduced sugar drink alternatives.

The new sugar tax law is expected to be borne directly by manufacturers, but as expected the tax burden will eventually be borne by the consumers. The law is divided into two bands depending on the sugar levels of drinks. For drinks with 5g to 8g of sugar per 100ml, a tax of 18p per litre, while those with over 8g of sugar per 100ml will attract a 24p tax for every litre.

Market leading brands such as Fanta, Ribena and Lucozade have already cut the sugar content of drinks.

As forecasted earlier, around £520 million is expected to be generated from the new sugar tax regime but with manufacturers reducing the sugar content of drinks, this value is expected to be lower. Nonetheless, there is still an expected change in price to reflect the new tax. As a consumer, be ready to pay more for less sugar.