Britain's sugar tax on soft drinks comes into effect

[LONDON] Britain's sugar tax on soft drinks came into effect on Friday, a move that will lead to some higher prices as the country seeks to battle childhood obesity.

The tax, announced in March 2016, has already cut sugar content in drinks by 45 million kg per year, Britain's Treasury said, as over 50 per cent of manufacturers have reformulated their products to be below the levy's sugar threshold.

"Our teenagers consume nearly a bathtub of sugary drinks each year on average, fuelling a worrying obesity trend in this country," Public Health Minister Steve Brine said.

"The soft drinks industry levy is ground-breaking policy that will help to reduce sugar intake, whilst funding sports programmes and nutritious breakfast clubs for children." Because of the reformulations, the Treasury now expects the levy to raise only about £240 million (S$442 million) in its first year, less than half of its prior forecast of 520 million.

Soft drink makers including Coca-Cola, Britvic and Lucozade Ribena Suntory have reformulated drinks, though Coca-Cola Classic, the nation's top-selling branded soft drink, is subject to the tax.

Retailers Tesco, Asda and Morrisons have also reformulated their own-label fizzy drinks to be below the levy's threshold.

REUTERS