Sugar tax could spark industry legal action

In last week’s Budget George Osborne revealed the tax would come into force in two years’ time and would raise £520M in its first year.

The British Soft Drinks Association, director general, Gavin Partington, said:  "At this stage all options are on the table. ​

“We need clarification about how this tax is going to work, exactly what's excluded and what's not. Nothing can be ruled out at this stage."​

A ‘legal minefield’​

Only last week Hilary Ross, executive partner and head of retail, food and hospitality at law firm DWF, said the introduction of a sugar tax would be a legal challenge for the government.  

“Introducing a sugar tax is a legal minefield – a  number of hurdles will need to be addressed, as demonstrated by the minimum alcohol pricing in Scotland, for whatever is proposed to comply fully with EU legislation,”​ she said.

However, individually drinks companies were unwilling to be drawn on possible legal action but said they would be looking closely at the government plans.

Coca-Cola failed to rule out legal action.

A spokesman said:  “We need to know more about the levy​ and how the government plans to implement it.  Once this is clear to us, we’ll decide on what steps to take as a business and how best to continue the work we have done to help people consume less sugar and calories from our drinks.”​

Britvic, which produces J20 and Pepsi, said it would review the details of the announcement and would fully engage in the consultation process.

“We remain of the view that only a holistic, wide-ranging strategy will tackle obesity,”​ said a Britvic spokesperson.

‘​Not solve obesity problem’​​

“Singling out soft drinks alone will not solve the obesity problem, given the small proportion of calories they contribute in the average diet.  ​

“As the Chancellor recognised during his speech, Britvic has already voluntarily made significant progress in calorie and sugar reduction, taking bold steps to remove over 18 billion calories since 2012.”​

Nichols, the supplier of Vimto and Panda Pops, said it had also worked hard and had already reduced sugar consumption by 8% year-on-year.

Marnie Millard, chief executive of Nichols, said: “Whilst we recognise sugar consumption is a shared responsibility, we do not believe that a tax on soft drinks is an effective solution or fair to consumers.”​

Meanwhile, don't miss three unanswered questions​ about the sugar tax.