Retailers have joined the soft drinks industry in slamming the news that an additional 7p tax on sugar-added soft drinks is to be debated in Parliament.
A petition by celebrity chef Jamie Oliver, whose documentary Sugar Rush was aired last week, has secured more than 130,000 signatures on the Downing Street website (Parliament considers all petitions that get more than 100,000 signatures for a debate).
Oliver, and some health groups, claim that a tax of 7p per regular-sized can of soft drink with added sugar could generate an additional £1bn per year and help reduce consumption.
Gavin Partington, director general of the British Soft Drinks Association (BSDA), said the evidence from other countries which had introduced soft drinks taxes did “not support his case”.
Both Belgium and Denmark rejected the notion of a tax in 2013 and evidence from France shows that while sales of soft drinks initially fell after a tax was introduced in 2012, they have increased since. In 2013 volumes grew again by 0.5% and by the end of 2014 sales were up 1%, the BSDA said.
“By contrast, the efforts by soft drinks companies including product reformulation, smaller pack sizes and increased promotion of low and no calorie drinks have led to a 7% reduction in calories from soft drinks in the last three years,” Partington added.
Ian Wright, director general of the Food and Drink Federation, also criticised the tax: “Additional burdensome taxes on foods or drinks, on top of the already enforced 20% VAT on many foods and drinks, would be regressive, ineffective and unworkable. This complex challenge needs a complex solution, one which involves and empowers people, not taxes them.”
Malcom’s Stores director Paul Cheema agreed: “I agree with the need for people to eat and drink more healthily but this is just getting ridiculous. This is just a money spinner, and it won’t do anything to reduce consumption. Just look at tobacco – our sales have not been affected by tax rises or any of the new legislation they keep forcing on the industry.”
Robert Teal from Vitesse Lifestyle Express in Barnsley is also against the tax and thinks it could harm disadvantaged shoppers. “An additional tax will just hit shoppers harder, and in in my opinion it could actually lead to a rise in consumption,” he said. “Why? Because it will prompt people to buy more multibuys. When prices rise, people look for value, and they look for deals. I’m currently selling Boost energy drinks for 49p a can and on a 3 for £1 deal. The deal is a huge success and cans are selling so quickly that I have actually sold out of one flavour.”
The UK soft drinks industry is already investing in re-formulation and low sugar developments, with 57% of the market currently low or zero calorie, 5% mid calorie, 38% regular.