Accountancy group UHY Hacker Young has reported that 326 UK beverage businesses have been affected by the soft drinks tax, otherwise known as the ‘sugar tax’.
The finding comes from a report by HM Revenue & Customs (HMRC). The effects of the tax, which came into effect in April, has pushed many drinks businesses to reformulate their products in order to avoid charging consumers more, with companies such as AG Barr reducing their sugar content of Irn-Bru by over half from 10.3g/100ml to 4.7g/100ml.
According to Hacker Young, due to the multitude of drinks companies following suit and using sugar alternatives, the amount brought in from the tax so far is an estimated £240 million. This is a significant shortfall of the estimated £520 million per year that the government had expected to fund school sports initiatives.
The figures are indicative of how a large portion of the beverage business has begun to adapt to the sugar tax without compromising on the taste of products or profits of soft drinks.
Hacker Young has noted the challenge the industry has faced in recovering from such a tax.
The firm said: “The evidence of health benefits from these taxes is relatively limited, but the sugar tax certainly adds to the burden of cost and red tape for businesses.
“It’s good to see the soft drinks manufacturers responding so positively to the new tax – reducing sugar levels in drinks makes sense financially, given the potential cost of the levy.”
© FoodBev Media Ltd 2019