A group of soft drink manufacturers, wholesalers and retailers, who, between them, employ more than 400,000 people across the UK, have joined forces to call for a rethink of the government’s proposed levy on soft drinks.
Plans for a charge on drinks with a high content of sugar – dubbed the “sugar tax” – were introduced by then-Chancellor George Osborne in March.
But now the campaign, which includes the British Soft Drinks Association and the Association of Licensed Multiple Retailers, has argued that the tax will create more harm than good. Citing a new report from Oxford Economics, it has warned that the tax will result in the loss of more than 4,000 jobs across the UK and lead to a decline of more than £130 million in the country’s economic output.
The coalition has warned that the the tax “will do nothing to tackle obesity, and risks causing thousands of job losses and higher prices for those who can least afford it”.
The British Soft Drinks Association has told FoodBev that it understands the government will launch a consultation into the soft drinks levy this week, possibly as part of a wider childhood obesity strategy, which is why it has decided to spearhead the new campaign now.
There have been sustained calls from elsewhere for the government to put the sugar tax on hold, after the UK’s decision to leave the European Union caused economic instability and volatility in the pound. The UK’s new prime minister, Theresa May, has remained relatively quiet on whether it would go ahead.
Gavin Partington, director general of the British Soft Drinks Association, which is providing the funding for the campaign, said: “We absolutely agree with the government that obesity levels are too high and action is needed, but burdening businesses and consumers with an ineffective tax is not the answer.
“We know from the evidence around the world where they’ve tried a tax that it will not make a difference to obesity. What it will do, as this report shows, is damage thousands of businesses across the entire soft drinks supply chain, from farmers to manufacturers, to convenience stores and the pub and restaurant trade.
“At a time of economic uncertainty the government needs to be supporting these businesses and working with industry to support actions that are already making a difference, such as reformulation, smaller packs, and more marketing of the many no-sugar options now available.”
The report from Oxford Economics also predicts that the tax will reduce consumers’ calorie intake by just five calories per person per day – the equivalent of one bite of an apple. In contrast, the companies have pointed out, sales off “full-sugar” soft drinks fell 44% in the ten years to 2014 and no contribute to less than 3% of all calories in an average consumer’s diet.
The British Soft Drinks Association’s own annual report found that sugar intake from soft drinks had fallen by 16% since 2012, despite a marginal increase in volumes, as FoodBev reported earlier this month.
It also noted that, between 2012 and 2014, UK soft drinks manufacturers increased their advertising spend on low- and no-calorie beverage options by 70%.
As well as manufacturers, the campaign will present the views of wholesalers, small retailers, newsagents, restaurants, bars and pubs.
Kate Nicholls, chief executive of the Association of Licensed Multiple Retailers, said: “The introduction of a tax on sugary drinks will increase cost burdens for businesses and consumers, and we do not believe it will be the ‘silver bullet’ that will tackle this country’s obesity problems.
“Eating out is an occasional treat and pubs and restaurants have worked hard to reformulate menus, reduce calories and provide customers with greater choice and nutritional information. Those efforts are ongoing, as part of the sector’s wider promotion of responsible consumption. An additional cost burden is unlikely to help in this regard.”
And Brigid Simmonds, chief executive of the British Beer & Pub Association, added: “Soft drinks are an important part of the sales mix [in pubs], and are a great choice for drivers. The new tax further increases the burden of taxation on pubs – and will push up prices of soft drinks for pub-goers.
“With research from Oxford Economics showing up to 1,800 jobs in the pub and restaurant sector alone are at risk from this tax, the government should think again about this unnecessary burden on our nation’s pubs.”
The group said it recognised that “tackling obesity is a major public health challenge” and said that it “wished to work with the government and other stakeholders to deliver effective and holistic policy solutions”. But, it added, obesity had increased by around 4% since 2004 despite changes to the formulation and marketing of soft drinks – and further legislation would continue to be ineffective.
Jonathan Hart, chief executive of the Automatic Vending Association, added another discounting voice.
He said: “Recent improvements in product labelling have already helped consumers control their calorie and sugar intake more effectively than before. We believe further transparency on product labelling and increased education on nutrition will achieve results which are long-lasting and effective – unlike a sugar tax, which would have serious negative consequences for the businesses of many of our members.”
The Federation of Wholesale Distributors, Scottish Grocers Federation, The Scottish Licensed Trade Association, the National Federation of Retail Newsagents, and British Sugar have also lent their voices to the campaign.
It is thought that the consultation period could allow concerns about the tax from within the government to surface.
As much as 80% of the parliamentary Conservative Party is thought to be opposed to stricter legislation.
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