Extensions to soft drinks sugar levy will have ‘tiny effects’ on sugar intake
The government’s intention to broaden the Soft Drinks Industry Levy by including drinks containing 4.5–5 g of sugar per 100 ml and pre-packaged milk-based beverages with added sugar aims to encompass an additional 12% of the soft drink market, according to recent research.
Research conducted by the Institute for Fiscal Studies (IFS) indicates that these modifications, unlike the initial SDIL, will yield minimal changes in sugar consumption. The IFS predicts an average reduction of only 0.3 kcal per person per day—less than one five-thousandth of the recommended daily calorie intake for adults.
This reduction is approximately 60 times less impactful than the original SDIL, attributed to a decrease in baseline sugar consumption from soft drinks since 2018, a smaller portion of the market being addressed, and lower expected sugar reductions per product. Consequently, the financial impact on families is also expected to be small, averaging less than 2p per week.
However, while the small impact might suggest inefficacy, the IFS asserts that these reforms could benefit households that purchase the most sugary items, who are at greater risk of excessive sugar intake. Nevertheless, set against government claims that these changes will ‘protect children and improve health,’ the actual effect on sugar consumption and childhood obesity appears negligible.
The reforms fail to address the fundamental inconsistencies in the current system, which allows high-sugar beverages to be taxed at lower rates than their lower-sugar counterparts. Implementing higher taxes on sugary products could more effectively reduce sugar consumption among heavy consumers.
Key findings from this research include:
- Producers responded significantly to the original soft drinks levy, often reformulating their products to fall below the taxable threshold. Before the levy was introduced, only 2% of soft drinks contained 4.5–5 g of sugar per 100 ml; this figure has since increased to 8%. The recent reforms will now include these beverages in the tax scope.
- The reforms target households most reliant on sugar for their caloric intake: 14% of soft drinks purchased by high-consumption groups will be affected, compared to 10% for households with lower levels of sugar intake. Even so, the impact on this high-sugar group is still minimal, resulting in a reduction of 0.4 kcal of sugar per day.
- Increasing taxes on the highest-sugar drinks would more effectively target heavy consumers. A 7p hike in the top tier of the SDIL would have comparable average effects on sugar intake while resulting in a larger reduction of 0.6 kcal per day for households with the highest sugar consumption.
Gautam Vyas, co-author and research economist, stated: ‘A well-crafted tax on soft drinks can effectively improve dietary habits—but the current Soft Drinks Industry Levy misaligns the targeting. Among taxable products, the drinks with the highest sugar content are taxed the least. These recent changes do not rectify this flaw.
‘A levy that imposes higher taxes on the most sugary drinks would be more in line with the objectives it seeks to address and would contribute more towards reducing sugar intake among the highest consumers.’
Martin Brogaard, another co-author and research economist, added: ‘These reforms should be viewed as minor adjustments to the existing framework rather than a substantive advance in combating obesity.’
Key Takeaways
- The expansion of the Soft Drinks Industry Levy aims to capture an additional 12% of soft drink sales.
- Projected average reduction in sugar consumption per person is only 0.3 kcal daily.
- The financial impact on consumers is expected to be minimal, averaging less than 2p weekly.
- The reforms primarily affect households that already consume high levels of sugar.
- Higher taxes on sugary beverages could more effectively engage heavier consumers.
- Current reforms are largely seen as minor adjustments rather than significant improvements.
FAQ
What is the Soft Drinks Industry Levy?
The Soft Drinks Industry Levy is a tax on sugary drinks intended to reduce sugar consumption and promote healthier choices.
How will the recent reforms affect sugar intake?
Experts estimate that the reforms will lead to a very small reduction in sugar intake of about 0.3 kcal per person per day.
Who will be most affected by these changes?
The reforms are designed to target households that purchase high amounts of sugar, although the impacts remain minimal.
Could the levy be improved?
Research suggests that increasing taxes on the most sugary drinks would more effectively reduce sugar consumption among heavy consumers.
