Sugar tax is 'not logical’ says soft drinks boss

• Strategy should involve diet
• Mexican soft drinks tax
• Childhood obesity strategy

Before I’m even sat down in the plush London office of the British Soft Drinks Association (BSDA), the elephant in the room is addressed.

“I can’t think why you wanted to see me,” teases Gavin Partington, the director general of the organisation still reeling from Chancellor George Osborne’s shock decision to impose a tax on soft drinks from 2018.

Three months on from the announcement, Partington expresses considerable bafflement about the logic behind the move. “Having had some time to reflect on it, we remain puzzled and somewhat confused as to why the government has chosen to pursue this approach,” he says.

“Our evidence shows that the efforts the sector is already taking is having a more significant impact on calorie intake than a sugar tax ever would.”

Partington’s main argument is clear. Thanks to the work undertaken by BSDA members in reformulating their products, sugar intake from soft drinks has declined by 13.6% in the UK since 2012, and continues to fall every year, according to Kantar Worldpanel.

That, allied with the increase in availability of smaller pack sizes and the promotion of low and no-calorie options, and it’s easy to wonder – if so much good work has been achieved, what made soft drinks such a soft target?

A former journalist who spent most of the 1990s as political editor of GMTV, Partington knows the ins and outs of Westminster better than most. Ever the diplomat, he treads a skilful line in measuring his responses without diluting what he wants to say.

“It’s quite clear that the government has, for the moment, chosen to take the politically expedient route of highlighting one particular ingredient and one particular product category, rather than thinking about a holistic approach to obesity,” Partington says.

He accepts that there is an issue for manufacturers of food and drink to address in relation to patterns of diet and consumption, but maintains that any approach to obesity should be much broader.

“Yes, a government strategy should involve diet, but it should also involve personal responsibility and physical exercise. It should look at the built environment, and it should look at the narrative that we extend as a society about the best and healthiest way to live,” he says.

Strategy should involve diet (Back to top)

While the legislation has yet to be formalised, the soft drinks tax (or levy) – which will apply to both producers and importers from April 2018 – is intended to raise £500M by its second year of implementation.

According to the Office for Budget Responsibility, this ‘implies’ that there will be a ‘main rate’ tax of 18p per litre (ppl) for drinks with 5–8g of sugar per 100ml, and a higher rate of 24ppl for drinks with more than 8g per 100ml.

Partington believes that some of the ambiguity coming from Westminster since the announcement means there is still much to resolve and, therefore, fight for.

“In the chancellor’s statement it was made clear that the tax would exclude pure fruit juices, but now it appears that the definition will centre on added sugar,” he explains.

“So, if a fruit juice contains added sugar, and that added sugar takes the drink over the 5g per 100ml level, then the tax would apply to all of the drink.”

While there are no plans for a legal challenge, Partington remains happy to meet and discuss the proposals with Treasury officials.

However, he is adamant that the BSDA is fundamentally opposed to the idea of taxation, because it doesn’t work.

Mexican soft drinks tax (Back to top)

But didn’t a tax on soft drinks in Mexico in 2014 lead to a 12% drop in sales in year one?

“Yes, I’m aware of that claim. The study [led by Mexico’s National Institute of Public Health] is often cited by public health campaigners, but they ignore the fact that the tax reduced total daily calorie intake by just 6.2 calories.

“Given the average person in the UK consumes 3,440 calories, 6.2 calories isn’t going to make any significant difference.”

Meanwhile, Partington doesn’t believe Hungary, where the introduction of a tax has led to a 40% reduction in the level of sugar in products, is a valid like-for-like comparison.

“Hungary is slightly different, because the tax applies to a whole range of products,” he says.

“There may also well be a greater sensitivity to price in Hungary than there would be in a more affluent market like ours.”

Partington believes that France, which introduced a soft drinks tax in 2012, is a more relevant case in point.

“In the first year of the soft drinks tax in France, volumes decreased by 2%. However, by 2013 they grew again by 0.5% and by the end of 2014 they were up by 1%.

“This suggests that tax is not a long-term route to reducing sales of products that you’re trying to decrease consumption of.

“Nor is it going to have a significant and long-lasting impact on levels of obesity.”

Delayed childhood obesity strategy (Back to top)

According to Partington, it remains to be seen whether the government’s delayed childhood obesity strategy – which looks set to be unveiled later this summer – will impose more legislation on the sector.

“Clearly, we know from the Public Health England evidence paper that measures in relation to promotions and pack sizes have been recommended, but what I would say is that with many of those proposals, our sector has already moved on.

“In addition to reducing sugar, increasing the availability of smaller pack sizes, and actively promoting low and no-calorie options, soft drinks companies have this year voluntarily agreed to extend current rules regarding advertising to children, to all online media.”

Despite such positive moves, Partington remains realistic that the wider food and drink industry has a battle on its hands to avoid taking all the blame for the nation’s obesity crisis.

“I think the industry needs to argue its case more collectively and more forcibly than perhaps it has done in the past.

“Previously, there has been a sense that one or two elements of the wider food industry were content for the focus to fall on soft drinks, rather than to recognise that there was a wider issue.”

He is uncertain whether most of the burden of the sugar tax will fall on manufacturers or retailers, but believes there are bound to be economic consequences “at some stage”.

Overall, Partington believes no one in the soft drinks industry is in denial about the fact that obesity is a major issue affecting British society.

“We can help reformulate products and reduce sugar content. We can provide consumers with those healthier options that they seek.

“The clear message we need to get out is that we are on the side of the consumers and can offer them choice – and that’s what we’re working towards.”