Sugar tax 'to be extended' to these drinks in Wales
The proposals would come into place in Wales
A tax on fizzy drinks could be extended to drinks like milkshakes and ready-to-go lattes in Wales, it has been confirmed. The UK Government has launched a consultation about ending an exemption in place for milk-based drinks, as well as non-dairy substitutes such as oats or rice.
The soft drinks industry levy, which is also known as the sugar tax, is a tax on pre-packaged drinks such as those sold in cans and cartons in supermarkets. It was brought in in 2018.
An original exemption for milk-based drinks was included because of concerns about calcium consumption, particularly among children. For our free daily briefing on the biggest issues facing the nation, sign up to the Wales Matters newsletter here
The government announced at Autumn Budget 2024 that it was looking at widening the restrictions.
The consultation sets out proposals for changes to the minimum sugar content threshold at which the levy applies, and the current exemptions for milk-based drinks and milk substitute drinks.
It is consulting on reducing the maximum amount of sugar allowed in drinks before they become subject to the levy from 5g to 4g per 100ml.
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It will mean 203 pre-packed milk-based drinks on the market, will be impacted unless their sugar content is reduced in accordance with the proposals, government analysis says.
The Welsh Government has confirmed it would, if the UK Government brings it in, would also be in place in Wales.
The three measures being consulted on are:
to reduce the minimum sugar content at which the SDIL applies to qualifying drinks from 5g to 4g. The SDIL standard rate would apply from 4g to 7.9g total sugar per 100ml, as opposed to 5g to 7.9g total sugar per 100ml currently
to remove the exemption for milk-based drinks whilst introducing a 'lactose allowance' to account for the natural sugars in the milk component of these drinks
to remove the exemption for milk substitute drinks with 'added sugars' beyond those sugars derived from the principal ingredient, such as oats or rice
Home Secretary Yvette Cooper said it was intended to improve the health of children. "We are making sure we are taking practical, sensible measures to improve the health of our children," she told BBC Breakfast.
However, the Treasury said young people only get 3.5% of their calcium intake from such drinks, meaning "it is also likely that the health benefits do not justify the harms from excess sugar".
"By bringing milk-based drinks and milk substitute drinks into the SDIL, the government would introduce a tax incentive for manufacturers of these drinks to build on existing progress and further reduce sugar in their recipes," it added.
The government consultation will run until July 21.
Industry body the Food and Drink Federation said "significant progress" had already been made and "many years of investment in research and development" had reduced sugar in soft drinks by 46% in the last five years, with a 30% sugar reduction in pre-packed milk-based drinks in the last three years.
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It said that food and drink manufacturers were facing a series of inflationary pressures and called on the government to "continue to create the right conditions for businesses to innovate and also be clear about their long-term goals to promote business confidence".
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