Sugar tax might be utilized to milkshakes below Treasury proposals | Meals & drink business

The sugar tax utilized to fizzy drinks might be prolonged to milkshakes and related treats below authorities proposals.

Plans to finish the exemption from the levy for dairy-based drinks, in addition to non-dairy substitutes comparable to oats or rice, have been put out for session on Monday.

The chancellor, Rachel Reeves, had mentioned in her price range final 12 months that the federal government would take into account broadening the tax to incorporate such drinks.

The Treasury confirmed plans to press forward with the adjustments on Monday, in addition to a proposal to scale back the utmost quantity of sugar allowed in drinks earlier than they change into topic to the levy from 5g to 4g per 100ml.

On account of widespread reformulation after the preliminary announcement of the so-called mushy drinks business levy (SDIL), 89% of fizzy drinks bought within the UK don’t pay the tax, the Treasury mentioned.

An estimated 203 pre-packed milk-based drinks in the marketplace, which make up 93% of gross sales inside the class, can be hit with the tax except their sugar content material is decreased below the brand new proposals, in keeping with authorities evaluation.

The SDIL was launched by the Conservatives in April 2018 as a part of their anti-obesity drive. The exemption for milk-based drinks was included due to considerations about calcium consumption, significantly amongst youngsters.

Nonetheless, the Treasury mentioned younger individuals solely get 3.5% of their calcium consumption from such drinks, which means “additionally it is possible that the well being advantages don’t justify the harms from extra sugar”.

“By bringing milk-based drinks and milk substitute drinks into the SDIL, the federal government would introduce a tax incentive for producers of those drinks to construct on current progress and additional scale back sugar of their recipes,” it mentioned.

The Institute of Financial Affairs, a rightwing free-market thinktank, expressed considerations about the price to shoppers of the proposed adjustments.

“The sugar tax has been such a dramatic failure that it needs to be repealed, not expanded,” mentioned Christopher Snowdon, head of life-style economics on the institute.

“Sugar taxes have by no means labored wherever. What occurred to Starmer’s promise to not increase taxes on working individuals?”

The federal government session on the plans will run from Monday till 21 July.