Budget 2016: Aqua Amore & The Sugar Tax

In yesterday’s Budget 2016 speech, Chancellor George Osbourne announced the widely anticipated ‘Sugar Tax’ – a levy on sugar sweetened beverages, coming into effect in April 2018. As stockists of UK’s widest range of soft drinks and bottled waters, Aqua Amore feel in a prime position to comment and summarise key points. Naturally, this tax has been condemned by the soft drinks industry and industry associations who feel their sector has been ‘singled out’ and defending their position. Conversely, public health campaigners have welcomed the levy. So let’s look at the facts and key areas of debate. Sugar Tax: What can be expected? The sugar levy only applies to ‘soft drinks’ and will have two distinct tiers: the first for total sugar content above 5g per 100 ml; and a second for drinks with more than 8g per 100 ml – this will exclude milk based drinks and pure fruit drinks, whilst the smallest drinks producers will have an exemption from the scheme. The stated intention for this would be to raise £520m for the Treasury in the first year (commencing April 2018), which in turn will be used to fund primary school sports in England, with the devolved administrations in Scotland, Wales and Northern Ireland free to decide how to spend their share. What the George Osbourne, UK Chancellor of the Exchequer, said:

“I am not prepared to look at my time doing this job and say to children’s generation I am sorry we knew there was a problem with sugary drinks ….We’re introducing the levy on the industry which means they can reduce the sugar content of their products – as many already do.“

What Christopher Tanousis, Co-Founder of Aqua Amore, observes:

“Ultimately, the UK soft drinks industry has already taken steps to address the levels of sugar in ‘soft drinks’, a broadly descriptive term which commonly refers to non-alcoholic drinks which are not bottled waters. For example, the modus operandi of smaller soft drinks producers such as Vit-Hit and Just Bee (to name but two) is a beverage which is both low in sugars and progressively, functional to enhance health and well-being. Meanwhile, highlighted producers such as Coca-Cola anticipated the market trend with products such as Coca Cola Life and Coke Zero (something George Osbourne acknowledged within his Budget speech). Growing obesity is something which should rightly be addressed, arguably in areas beyond just soft drinks to also include hidden sugar sources such as take home food sectors, but if the sugar tax acts as a reminder that awareness of personal health is imperative and that products with a higher sugar content should be treated as treats (think: chocolate) to be consumed as part of a balanced diet then it achieves a primary objective.”

What Ian Wright, director general of The Food and Drink Federation, said:

“We are extremely disappointed by today’s announcement of a new tax on some of the UK’s most successful and innovative companies … For nearly a year we have waited for an holistic strategy to tackle obesity. What we’ve got today instead is a piece of political theatre …The imposition of this tax will, sadly, result in less innovation and product reformulation, and for some manufacturers is certain to cost jobs. Nor will it make a difference to obesity. Many of those singled out today by the Chancellor have been at the forefront of efforts to provide consumers with healthy choices. The industry will now ask whether such efforts are still affordable.”  

What Gavin Partington, director general of the BSDA said:

“We are extremely disappointed by the Government’s decision to hit the only category in the food and drink sector which has consistently reduced sugar intake in recent years … We are the only category with an ambitious plan for the years ahead – in 2015 we agreed a calorie reduction goal of 20% by 2020 …“By contrast sugar and calorie intake from all other major take home food categories is increasing – which makes the targeting of soft drinks simply absurd.”

What Jon Woods, General Manager of Coca-Cola Great Britain, said:

“We understand obesity is an issue that needs to be addressed and will continue our work to reduce the sugar and calories consumed from our drinks. 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.”

What Professor Graham MacGregor, chair of Action on Sugar, said:

“We are delighted to see in today’s budget announcement that the government will be introducing a new sugar levy on soft drinks which will be used to double the funding they dedicate to sport in every primary school …However, for this to be effective it is imperative that the levy is at least 20% on all sugar-sweetened soft drinks and confectionery and escalate thereafter if companies do not comply with reformulation targets – and this must be implemented immediately.”

Meanwhile, Celebrity Chef Jamie Oliver who led a petition to the UK Government and Parliament, happened to be walking outside the Houses of Parliament during the announcement, and spoke to Sky News. To conclude, the introduction of a Sugar Tax on ‘Soft Drinks’ was fully expected within the industry, and something that the team at Aqua Amore long anticipated by stocking and supplying a very wide range of low-sugar ‘soft drink’ beverages alongside our bottled mineral waters, which we continue to deliver to homes, offices and the on-trade in London, Surrey and beyond. Whilst efforts have already been made to lower sugar content in popular soft drinks, for example Schweppes Indian Tonic vs Schweppes Slimline Indian Tonic, we firmly believe that that ‘soft drink’ industry will continue to evolve and that smaller producers will continuously introduce excellent new beverages to the market place. And Aqua Amore will be at the forefront of new soft drink innovations.