UK unveils sugar tax; shares of soft-drink makers fall by over 5%

London

Companies that profit from Britain's sweet tooth plunged as the UK unveiled a sugar tax, a surprise move that adds another burden to food and beverage companies grappling with marketing restrictions and a shift towards healthier fare.

Soft-drink makers Britvic plc and AG Barr plc both declined more than 5 per cent in London, while ingredient suppliers Tate & Lyle plc and Associated British Foods plc fell as much as 4.9 per cent and 1.5 per cent, respectively. UK Chancellor George Osborne said the levy on the soft-drinks industry will be introduced in two years' time, in two bands depending on how much sugar is in a drink. The tax will raise £520 million (S$1.02 billion) in its first year, according to government estimates, part of which will go to schools to promote healthier lifestyles.